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Food waste's $100M future

May 31, 2022

Shoshana Gordon/Axios

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.

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.

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