Jun 7, 2022 - Energy & Environment

Rheaply, a circular economy startup, raises $20 million from big names

Illustration of arrows made of folded money forming a circle.

Illustration: Aïda Amer/Axios

Rheaply, a Chicago-based startup that helps companies quantify and manage their purchased goods and resources in order to cut carbon emissions, has raised $20 million in new funding, the company told Axios.

Why it matters: Rheaply is going after low-hanging fruit in carbon emissions that, if tackled at scale, could yield significant benefits in avoided or reduced emissions, says founder and CEO Garry Cooper Jr.

  • Getting companies to think more about the carbon emitted during the manufacturing process, and then associated with everything from buildings to office chairs as "embodied carbon," is a key goal for Rheaply, he told Axios in an interview.
  • In this way and through other means, Cooper aims for the company to significantly advance the circular economy.

Context: The new funding round is led by AOL founder Steve Case's Revolution's Rise of the Rest Seed Fund. Additional funders include other prominent investors such as the John Doerr Family Trust, PSP Partners and Emerson Collective, among others.

How it works: The company currently operates software that is used by about 50,000 people, Cooper said. This includes employees at about 25 companies, including Google, Exelon and AbbVie, as well as universities such as MIT, where students and faculty can use the platform to reuse lab equipment.

  • According to a statement, the company is working to develop enterprise resource planning technology that will help organizations to track and exchange resources, such as office equipment, from the purchasing to the waste stage.
  • This, the company hopes, will provide customers with a more complete picture of their environmental impact, and help them to avoid unnecessary purchases of new equipment in favor of reused material.

The big picture: Rheaply's newest product, launched three weeks ago, aims to help companies account for the avoided carbon emissions from reusing resources, paving the way for integrating such actions into their sustainability targets.

  • This puts the company in a unique spot given the corporate sector's growing focus on accounting for and reducing greenhouse gas emissions.
  • Rheaply is looking to expand its work in the energy and utility sector specifically, including by building a circularity community at Nicor Gas, which aims to hit net-zero methane emissions from its operations by 2030.
  • Cooper, a neuroscientist by training who once focused on researching treatments for Parkinson's disease, says the new funding will be put to use in product development.
  • He hopes to enable the company to partner with more companies as well as cities. Rheaply is already working with the city of San Francisco to help them develop and scale up their product reuse programs.

Between the lines: One of the few Black CEOs in the climate tech sector, Cooper said he's also looking to address climate justice, given the tendency for landfills to be located in lower-income and under-represented communities.

  • The circular economy hasn't been at the forefront of climate tech firms earning big investment rounds, with recent funding focused on carbon mitigation and removal, as well as next-generation energy generation technologies.
  • Cooper said one of the biggest challenges involves mapping where all of a company's physical resources are, in order to find re-use opportunities.
  • "We have to re-map the world," he said. "Nothing can flow unless we know where it's at."
  • "While so much of our energy is spent thinking about how to build new things in a more sustainable way, we just throw away massive amounts of what we have already built," said Penny Pritzker, chairman and founder of PSP Partners, who served as commerce secretary under President Obama, in a statement to Axios.

What they're saying: Case, the chairman and CEO of Revolution, said Rheaply is unique for its focus on the "enterprise world," rather than consumers. "Every individual needs to do their part, but it’s critically important that businesses, responsible for the large majority of emissions, get on board," he told Axios in a statement.

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