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Apparel recycling startup Circ nabs $30M

Jul 12, 2022
Illustration of a recycling symbol being stitched onto fabric.

Illustration: Gabriella Turrisi/Axios

Circ, an apparel recycling startup, raised $30 million in Series B funding from Breakthrough Energy Ventures and Inditex, the parent company for clothing maker Zara.

Why it matters: Companies such as Inditex are taking a page out of the venture capital playbook by investing in mid- and early-stage climate-related startups, a trend that both puts them in competition with the investors and creates an added pool of capital to pull from if you're an entrepreneur seeking funding.

Details: Breakthrough Energy Ventures will get a board seat as part of the all-equity deal, which closed in June.

  • Circ president Pete Majeranowski declined to disclose the round's valuation.

Flashback: Circ survived — though barely — the Cleantech 1.0 bust as a biofuels company before pivoting its hydrothermal extraction technology to apparel recycling.

How it works: Majeranowski says Circ is essentially a textile commodities provider.

  • Circ's Virginia-based factory takes old garments, shreds the fabric, treats it, and then uses what he calls a "fancy pressure cooker" to depolymerize the fabric and separate it from any other materials such as cotton, which it can separately treat and re-spin into useable textiles.
  • It sells the final textiles back to apparel makers like Patagonia.

The intrigue: Majeranowski said that there was no definitive customer agreement in the deal with Inditex, a nearly $73 billion market-cap business that, in addition to Zara, owns several other apparel makers.

  • He said it's something Circ is planning for "down the road" and that a partnership in the future is "implied" as a result of the round.
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