Food waste's $100M future
Last week's food waste partnership between ReFED and Closed Loop Partners contained a unique feature that you don't often see in venture capital: a low return target.
Why it matters: Food-waste investment is surging, including from VCs. This partnership, however, does not aim to follow the typical VC model that expects hockey-stick growth and near-immediate returns.
- Instead, it will focus less on high growth, and more on steady, single-digit returns.
What's happening: ReFED, a nonprofit organization that focuses on fighting food waste, is teaming up with venture firm Closed Loop Partners on a $100 million initiative — part philanthropy, part traditional VC — to back food waste startups and organizations.
- The two firms made the announcement last week.
How it works: The initiative, called Circular Food Solutions Funding Platform, includes an $80 million investment fund that Closed Loop Partners will lead with ReFED as an adviser.
- It also includes the $10 million ReFED Catalytic Grant Fund, announced on March 7, and a $10 million program similar to a startup accelerator model, led by Closed Loop Partners.
The intrigue: The investment fund will target single-digit returns instead of the typical 20% to 30% in most venture funds, says Alexandria Coari, ReFED's vice president for innovation and engagement.
💭 Our thought bubble: The initiative could be a boon for many climate technology companies that don't have clear revenue models or are squarely nonprofits but are still working on important issues.