Singapore-based investment firm Circulate Capital has successfully secured $220 million in the first close of its second Asia-focused fund, defying a global downturn in environmental, social, and governance (ESG) investments. This new capital injection, part of the Circulate Capital Asia Fund II, brings the firm’s total assets under management to US$480 million. The fund is dedicated to scaling circular supply chains and recycling businesses across South and Southeast Asia, reinforcing investor confidence in sustainable, high-impact ventures.
Navigating a Challenging ESG Market
The successful fundraising arrives during a challenging period for the sustainable investment sector, which saw significant net outflows last year. Despite this trend, Circulate Capital attracted substantial commitments, signaling a strong appetite for impact funds that deliver competitive financial returns. This achievement underscores the growing recognition that environmental solutions can and should be commercially viable, a principle championed by the firm and its backers.
Strategic Investors and Expanded Focus
The new fund is backed by prominent investors, including Builders Vision, the family office of a Walmart founder’s grandson, and the Emerging Markets Climate Action Fund. This diverse support complements existing corporate partners like The Coca-Cola Co. from the firm's previous funds. The fund will broaden its investment scope beyond plastics to also target circular solutions in electronics, apparel, and sustainable packaging.
Circulate Capital Asia Fund II aims to raise a total of $300 million by 2026, targeting a net internal rate of return of around 20 percent. The fund will deploy growth capital in key markets such as India, Indonesia, Thailand, Vietnam, the Philippines, and Malaysia. Investment ticket sizes are expected to average between $15 million and $25 million, focusing on high-growth enterprises.
Building on a Proven Track Record
This latest initiative builds on the success of the firm’s first vehicle, the Circulate Capital Ocean Fund I, which raised capital to combat plastic pollution. That fund made foundational investments in companies like Indian plastic recycler Lucro Plastecycle and waste management firm Nepra. These early ventures established Circulate Capital’s model of providing crucial financing to enterprises in the waste management and recycling sectors.
Since 2020, the firm’s portfolio companies have added nearly 900,000 tonnes of annual collection and recycling capacity. Circulate Capital has also demonstrated financial success through multiple exits, including a full exit from digital waste platform Recykal. These results prove that circular economy investments can generate both significant environmental impact and attractive returns for investors.
A Vision for a Mainstream Circular Economy
According to founder and CEO Rob Kaplan, the firm is working to establish the circular economy as a mainstream asset class capable of delivering liquidity and strong performance. This mission is critical, as industry estimates show that only 7.2 percent of the over 100 billion tonnes of raw materials consumed globally each year are circular. The investment potential is immense, with plastics recycling infrastructure alone requiring nearly US$100 billion by 2030.
In conclusion, Circulate Capital's latest fundraise represents a significant milestone for the circular economy in Asia, channeling vital capital into a rapidly growing sector. By demonstrating a track record of both financial performance and measurable environmental impact, the firm is paving the way for sustainable investing to become a core component of institutional portfolios. This strategic deployment of capital is set to accelerate the transition toward more resilient and resource-efficient supply chains across the region.