Where Global Innovation
and Capital Meet
Sectors Consumer University Energy Financial Healthcare Industrial IT Media Services Telecoms Transport The Art of CVC Startups

The circular economies of carbon, plastic and water

Cross-industry collaboration is needed to turn waste into wealth.

Even as 2023 broke records as the hottest year on record, globally, the pushback against policies to achieve net zero emissions targets is gathering place. Populist backlash across Europe is causing governments to water down climate policy and there are fears that a new Trump presidency would result in the same in the US. Net-zero targets may have become a business norm, but they are politically vulnerable unless implemented in a way that doesn’t make people feel poorer.

This is why the circular economy has become such a powerful concept in the battle against climate change. The circular economy is a version of sustainability that doesn’t mean cutting back, but using things better, turning what was once considered waste into a new feedstock, whether we are talking about plastics, carbon, water management or any other material.

“At the core circularity is better design products, better packaging, less waste, more longevity,” says Angie Grimm, member of the Sustainability Council Advisory Board. “It is less waste and more effective use of precious resources.”

The circular economy can contribute to economic growth by fostering innovation, creating new business models and generating employment opportunities, says Phoebe Wang, investment partner at the Amazon Climate Pledge Fund. Industries that adopt circular practices can benefit from cost savings, increased competitiveness, and access to new markets driven by consumer demand for sustainable products.

“At the core circularity is better design products, better packaging, less waste, more longevity.” – Angie Grimm, member of the Sustainability Council Advisory Board


“We believe circular economy play a vital part of sustainability and achieving climate goals. That’s the reason why we invested in companies such as Genecis Bioindustries, a biotech company turning organic waste into sustainable, biodegradable materials, offering a circular economy solution to various industries,” says Wang.

We asked members of the Global Corporate Venturing Sustainability Council — investors at some of the world’s largest companies, including Amazon, Evonik, The Heritage Group, Johnson Controls and Saint-Gobain — what they were focusing on to meet green goals. We had a wide range of answers, from agritech to hydrogen, biofuels to carbon capture. But one area of overlap is the circular economy.

This is fortunate because the circular economy is an area that needs widespread collaboration for it to work. Multiple companies from across different sectors must come together to supply, produce and purchase.

“For this to work out, we need a collaborative effort from all the stakeholders, from everybody, working together towards the same goal,” says Jan Marchewski, an associate at electronics and industrial technology group Hitachi’s venture arm who specialises in environmental technology. Marcheswski was commenting specifically on the carbon market, but the same applies to any material.

That was one of the reasons we have put together this report into three circular economies: carbon, plastics and water. The GCV Sustainability Council members shared with us some of the startups they have found the most promising, as well as sharing details and learnings from pilot projects that they are backing. The idea is to share best practice as widely as possible and to invite other companies to join the effort.

You can find out more about the work of the GCV Sustainability Council here or by getting in touch with Amber Knapp, the GCV Advisory Board and GCV liaison.

It is becoming easier to capture carbon, but deciding what to do with it is hard

CCS (Carbon Capture and Storage) on wooden blocks on environment background. net zero action concept Reduce the risk of climate change, green energy, carbon capture and storage.

Capturing carbon from the oceans, and ways to use it in consumer products like plastics are some the emerging technologies that investors are looking at.

Although much of effort to combat climate change focuses on reducing energy use and switching over to renewable energy sources, there is a growing recognition that removing carbon dioxide from the atmosphere needs to be part of the toolkit too.

“No matter how much energy is coming from renewable energy sources, there will always be emissions, and that is why we need carbon removal in general – not just in the transition to renewable energy but also going beyond that,” says Jan Marchewski, an associate at electronics and industrial technology group Hitachi’s venture arm who specialises in environmental technology.

Much of the corporate funding for the carbon capture use and storage technology is coming from oil and gas or industrial companies, but there is relatively widespread interest through many sectors. Angie Grimm was until recently vice-president of corporate development for IBM as well as heading its corporate venture unit, and she’s looked carefully at the role carbon management and offsetting can play in the future of the enterprise industry.

“If you extend out and forecast where that carbon position is today and where the enterprise [industry] will be when their carbon targets are due and their net-zero initiatives have their day of reckoning, they probably won’t get there just with mitigation and adaptation,” she tells Global Corporate Venturing. “So, I was advocating that we start looking at carbon offsetting for part of the solution that will pick up momentum over time.”

The idea is relatively simple in theory. If emissions can be captured at the source, generally large industrial or fossil fuel hubs, it can be prevented from reaching the atmosphere where it joins other greenhouse gases to trap heat near the Earth’s surface and contribute to global heating.

There has been tentative progress in recent years, with companies like LanzaTech, Elysian and Climeworks raising hundreds of millions of dollars as they look to bring the technology further to market.

Direct air — and ocean — capture of carbon

Petroleum producer Occidental, an early adopter of carbon capture and storage (CCS), recently sold off its landmark carbon capture plant Century, in what looked like a less-thanencouraging environmental move. But the sale was part of Occidental’s plan to move from the traditional CCS technology used in Century to direct air capture (DAC), which extracts CO2 from the air rather than from a specific source of emissions. DAC is currently expensive, but the costs are expected to fall as technology improves. And there are other solutions.

One Hitachi Ventures portfolio company is Captura, developer of a system that takes CO2 from the ocean, where it is stored in far higher concentrations than in the atmosphere, allowing it to then absorb more from the air. That could hypothetically make the capture process more cost-effective, in addition to providing a reliable stream of carbon for customers.

“Direct ocean capture allows you to produce a steady stream of CO2 and you have some flexibility there, so if you decide to sequester it, store it and sell it into the carbon market, that’s great,” says Hitachi Ventures principal Ankesh Madan. “But you also have a relatively pure stream of CO2 you can actually leverage for other technologies that can take it and convert it into other chemicals or commodity products.”

Uses for captured carbon

The question of what do with captured carbon is still up for some debate and at the crux of a debate about what a circular economy for carbon might look like. How do you use the carbon that is captured in a way that is environmentally responsible? For instance, the carbon from Occidental’s Century plant was used in more petrochemical products, while Lanzatech’s offering is directed towards aviation fuel. In both cases, that captured carbon is simply released into the atmosphere again after a short time.

One way to store carbon more permanently is in porous rock formations underground, while others focus on water. The financial returns from these methods come from carbon credits, but those are reliant on market prices and can in practice allow large polluters to carry on as usual in the background.

And even with these projects, there is a question over the longevity of the storage.

“Can you bury that carbon for 100 years or 1,000 years?” asks Grimm. “Because that is truly offsetting it. If you’re burying it for a decade, you’re just kicking the can down the road.

“You need to bury it for 100 years for this to be an effective technology,” she says. But, she adds, “there are costs associated with burying it and maintaining that, just like with a nuclear facility. It’s a fantastic near-term solution but there are a lot of long-term implications that have to be thought through.

Proportion of corporate vs non corporate backed VC deals in CCUS tech 2012-23

Putting carbon into consumer products

Repurposing captured carbon for use in consumer products is the other sequestration solution on the table, and that’s the one favoured by Min Zhou, founding CEO of China-based VC firm CM Venture Capital.

“We have a thesis that capturing carbon is not that difficult,” Zhou explains. “The technology already exists. The issue is finding a profitable use for the carbon. Because if you can’t find a more profitable use for it than pumping it underground, the economics don’t work for a lot of companies. What are you going to do with the carbon that is captured?”

CM has examined various methods of reusing carbon, one of which Zhou says, is as a base for animal feed. China imports some 90% of its feed, and CM is considering investing in a startup that takes CO2 from agricultural waste, feeds it into a microbe and grows it into the protein element of animal feed, using hydrogen as an energy source.

An existing CM portfolio company, Econic, meanwhile converts carbon into compounds which can replace fossil fuel-based plastics in the production of consumer goods like clothes, construction materials or mattresses. For Zhou, that kind of solution ticks two boxes.

“Firstly, we will still need plastic,” she says. “And secondly, for our investment thesis we believe you need to invest in something that is big category, that can take a large amount of CO2 and can create a huge amount of impact. So, we’re looking for those singular categories where…once it gets to maturity, it can be deployed anywhere and can have future market potential.”

Whether they are looking at capture or conversion, most investors agree on two things. Firstly, there needs to be regulation in place to encourage capturing and repurposing CO2. We need rules to decide who’s responsible for cleaning it up, who’s responsible for using less and who’s responsible for financing it all in a social and just way, as Grimm says. Secondly, industry needs to come together to support it, because everyone is going to be affected.

VC backed deals in carbon capture, utilisation and storage (CCUS) 2012-23

“For this to work out, we need a collaborative effort from all the stakeholders: industry, from politics and regulators, the carbon markets, from everybody, working together towards the same goal,” says Marchewski.

“Maybe I’m preaching to the choir, but if you think about the targets being set, the 1.5º – we can’t afford to go over that, and right now we’re going to blow past it, 2º is probably the current baseline,” adds Grimm. “Well, think about the billions of dollars that are going into literally loss, protection and re-establishing what you had in place, because of climate-related risks.

“Is it more costly to pay for the carbon sequestration technology today, or to relocate an entire manufacturing facility as your water levels rise? Those are the kinds of simulations I think are going to happen over time.”

Ultimately though, time is what may stand in the way of carbon capture. The world needs to cut emissions fast, and this is a technology that is still relatively nascent. If the big carbon emitters are genuinely serious about this as a way to cut those emissions, they need to put their money where their mouth is.

“I think we’re at the very, very, very beginning,” says Zhou. “All the carbon capture and utilisation together is altogether less than 1% of what is emitted right now. We are at the very beginning of this, and I don’t think it will be a single solution that solves the whole problem, it is going to be multiple technologies. That’s why we’re investing across materials technology, digital technology, energy tech and carbon utilisation – it needs to be everything coming together and us making the effort to reduce by a few percent in the coming decade.”

Investor views
Ascan Voswinckel
head of venture capital, Beiersdorf

“Today chemical recycling appears to be the more robust option in terms of degrading of material and quality of output, but with the clear challenge of the need to be more energy efficient.”

Ginger Rothrock
senior director, HG Ventures

“Water is not expensive today. I think it’s going to be expensive in the coming years. It’s going to be very expensive.”

Min Zhou
CEO, CM Venture Capital

“We have a thesis that capturing carbon is not that difficult. The technology already exists. The issue is finding a profitable use for the carbon.”

Startups to watch
1 of 17

Founded: 2021
Based: US
Funding to date: $12m

US startup Captura specialises in direct ocean capture of carbon. Its technology removes excess CO2 from the upper ocean, so that it can naturally absorb more carbon from the air. It does this by using membrane and electrodialysis technology that extracts CO2 directly from seawater to be permanently stored or reused.

Captura was founded by California Institute of Technology researchers Harry Atwater and CX Xiang, chief technology officer, in 2021. Captura raised $12m in a series A round led by Equinor Ventures, the corporate venture arm of Norwegian petroleum refining company Equinor. Other corporate investors include Saudi Aramco’s venturing unit Aramco Ventures and Hitachi Ventures, the corporate venture arm of electronics maker Hitachi. Other investors include California Institute of Technology’s Seed Fund and Future Planet Capital.

2 of 17

Carbon Upcycling Technologies
Founded: 2014
Based: Canada
Funding to date: $32m

Carbon Upcycling Technologies combines CO2 with industrial byproducts and natural materials to improve the performance of cement, plastics, consumer products and fertilisers.

It was launched by Apoorv Sinha, chief executive, in 2014. Sinha spent a year as a research assistant at the University of Calgary. He also spent four years as the vice president of research and development at TOHL, a Canada-based civil engineering company.

Carbon Upcycling Technologies has raised $32m. Its most recent round was in July 2023 when it raised $26m in a series A round led by BDC Capital’s Climate Tech Fund. Participating investors include Cemex Ventures, the corporate venturing arm of Mexico-based building materials company Cemex, and Occidental Petroleum’s corporate venture arm, Oxy Low Carbon Ventures.

3 of 17

Founded: 2012
Based: Canada
Funding to date: Undisclosed

Carboncure has developed a carbon removal technology that injects captured carbon into concrete during mixing. In this process CO2 becomes chemically converted into a mineral. This technology produces harder concrete whilst also supplying carbon credits to customers.

The Canada-based startup was founded by chief executive Robert Niven in 2012. Niven has founded other startups including carbon management consulting company Carbon Sense Solutions, which was launched in 2007.

In July 2023 Carboncure secured $80m in a funding round led by venture capital firm Blue Earth Capital. Other investors include Breakthrough Energy Ventures, Amazon’s Climate Pledge Fund, Microsoft Climate Innovation Fund and Samsung Ventures. Venture capital firms Taronga Ventures and BH3 Growth Equity also participated in the financing.

4 of 17

Cruz Foam
Founded: 2017
Based: US
Funding to date: $25m

US startup Cruz Foam has developed technology to replace Styrofoam. Cruz Foam’s packaging product consists of chitosan, a material made from shrimp cells.

It was founded by chief executive John Felts and chief scientific officer Marco Rolandi in 2017. Felts worked for five years as an engineer at consulting firm Tetra Tech. Rolandi is a professor of electrical and computer engineering at the University of California, Santa Cruz.

In 2022 Cruz Foam raised $18m in a series A round led by technology funding organisation Helena. Other investors include social media monitoring platform One Small Planet as well as venture capital firms Regeneration Venture Capital, At One Ventures and SoundWaves. Hollywood actors Ashton Kutcher and Leonardo Di Caprio have also invested.

5 of 17

Founded: 2020
Based: Switzerland
Funding to date: $13.8m

DePoly has developed a chemical recycling technology that converts PET plastics and polyester textiles back into their raw materials form at room temperature. It can do this without washing, presorting and separating the plastics.

It was founded by chief executive Samantha Anderson, chief technology officer Bardiya Valizadeh and chief scientific officer Christopher Ireland in 2020. Anderson has a doctorate in carbon capture and storage from École polytechnique fédérale de Lausanne.

The company raised $13.8m in a seed round in June 2023. The round was co-led by BASF Venture Capital, the corporate venture arm of German chemicals manufacturer BASF, and venture capital firm Wingman Ventures. Other investors include personal care products maker Beiersdorf and Ciech Ventures, the venturing arm of Poland-based chemicals company Ciech.

6 of 17

Founded: 2011
Based: US
Funding to date: $7.6m

French startup Dioxycle develops technology that converts carbon dioxide into industrial chemicals and fuels. The startup’s proprietary electrolyser uses water, carbon dioxide and electricity to create ethylene. The catalytic cores contain special metal alloys, which improve the efficiency of the process and reduce costs.

Dioxycle was founded by chief executive Sarah Lamaison and chief technology officer David Wakerley in 2020. Wakerley is an experienced postdoctoral researcher in the field of renewable fuels chemistry. Lamaison is an expert in biochemistry and was awarded the L’Oreal-UNESCO for Women in Young Science Talent Prize in 2020.

In July 2023 Dioxycle raised $17m in a series A round, which was co-led by VC firm Breakthrough Energy Ventures. Gigascale Capital, C2V Initiative and Urban Future Labs also participated.

7 of 17

Econic Technologies
Founded: 2011
Based: UK
Funding to date: $43.2m

UK-based Econic Technologies has developed a catalyst that extracts carbon which can be upcycled into products used in cars, apparel, furniture and construction, among other industries. It licenses its technology to polyols and surfactants manufacturers.

It was founded by Charlotte Williams, chief scientific officer, in 2011. Williams is a professor of inorganic chemistry at the University of Oxford.

The company has raised $43.2m. It most recently raised $12.45m in a series D round led by OGCI Climate Investment and the Sustainable Chemistry Fund, a fund managed by Capricorn Partners. Other investors include ING Sustainable Investments, the investment unit of financial services group ING; GC Ventures, the corporate venture capital arm of oil and gas company PTT; and venture capital firm CM Venture Capital.

8 of 17

Founded: 2014
Based: US
Funding to date: $7.19m

Electramet is a US water treatment company that removes heavy metals such as copper and chrome from industrial wastewater streams. The startup uses activated carbon electrodes and low levels of electricity to attract, immobilise and filter metals. This results in minimum sludge production and 100% water recovery.

Cameron Lippert, chief executive, and James Landon, chief technology officer, founded Electramet in 2014. Both worked at the University of Kentucky’s Center for Applied Energy Research as researchers.

The startup has raised $7.19m. It secured a strategic investment from semi- finished products supplier Wieland in 2021. Other investors include HG Ventures, the corporate venture unit of US-based heavy construction and materials corporation The Heritage Group.

9 of 17

Genecis Bioindustries
Founded: 2017
Based: Canada
Funding to date: $15m

Genecis Bioindustries is a Canadian organic waste processing startup. The company uses specialised bacteria to convert food scraps into bioplastics which can be used in the food packaging and medical tools sector.

The company was founded by Luna Yu, CEO, in 2017. Yu invented the technology while studying environmental science at the University of Toronto.

Genecis has raised $15m. It most recently raised $7m in a series A round in 2022, led by venture capital firm Kholsa Ventures. Food manufacturer Heinz Group participated. In early 2023 Genecis received an undisclosed investment from Amazon’s Climate Pledge Fund through its Female Founder Initiative, which invests $50m in female-founded climate technology companies. BASF is also an investor

10 of 17

Interface Polymers
Founded: 2016
Based: UK
Funding to date: $10m

The University of Warwick spinout has created a new additive, polarfin, which modifies surface properties of commodity plastics such as polyethylene to create sustainable and customisable co-polymer materials.

It was founded by director and chief scientific officer Chris Kay in 2016. Kay was a postdoctoral researcher for two years at the University of Warwick where his research focused on the compatibility of commodity plastics and scalable block co-polymers.

Interface Polymers has raised close to $10m. It raised $8m in a series A round in May of this year. Investors include GC Ventures, the corporate venture unit of Thailand-based oil and gas company PTT. The spinout also received funding from angel networks such as London-based firm 24 Haymarket.

11 of 17

Founded: 2021
Based: Kenya
Funding to date: $3.34m

Kubick is a Kenyan startup that turns hard-torecycle plastic waste, such as polypropylene, into affordable building materials.

The company was founded by Kidus Asfaw, chief executive, and Penda Marre, chief production officer, in 2021. It plans to expand its production plant in Ethiopia. Marre previously spent a year as a project manager and manufacturing director at Unicef. Asfaw also worked for Unicef for nine years as the technology and innovation partnerships lead.

In June 2023 Kubik raised $3.34m in a seed funding round. Investors include venture capital firms Plug and Play, African Renaissance Partners and Andav Capital. The startup has received no corporate backing.

12 of 17

Founded: 2019
Based: UK
Funding to date: $10.7m

Bristol-based startup Matter has developed a solution to capture, harvest and recycle microplastics. The company specialises in preventing microplastic fibres from clothing getting into waterways and oceans through washing machines.

Matter was founded by Adam Root, chief executive, in 2019. Root spent five years at UK household appliances manufacturer Dyson where he was the senior design engineer and advanced design engineer.

In August 2023 Matter raised $10m in a series A funding round led by venture capital firm S2G Ventures and which saw participation from SoundWaves, a global accelerator. The company has no corporate investors. It was provided with several grants by government agency Innovate UK.

13 of 17

Founded: 2011
Based: UK
Funding to date: $43.2m

Onvector develops non-chemical water treatment technology. The US startup’s plasma vortex technology targets hard-to-treat contaminants such as forever chemicals in water and wastewater. The technology is aimed at reducing costs and improving compliance in the industrial sector.

Dan Cho, chief executive, founded Onvector in 2014. He has more than 15 years of experience in non-chemical water treatment and cleantech having previously worked for Pentair Water Treatment as a principal consultant. He previously worked in the medical device industry as the president of cardiovascular diagnostics startup Rheologics.

Onvector’s total funding has not been disclosed. In July 2023 the startup raised $2.5m in a seed round with the investors also being left undisclosed. Investors outside of the seed round include Massachusetts Clean Energy Center, a publicly funded agency, and venture capital firm Ben Franklin Technology Partners.

14 of 17

Founded: 2014
Based: US
Funding to date: $7.19m

Puraffinity is a developer of solutions that remove PFAS, or “forever chemicals”, from water. The startup’s technology engineers the surface of raw materials using tailored molecular groups which results in absorbent materials sensitive to PFAS trapping and removing from the compounds from water.

The UK-based startup was founded by Henrik Hagemann, chief executive, and Gabi Santosa, chief strategy officer. Hagemann completed an Enterprise Fellowship with the Royal Commission for the Exhibition of 1851. He was also featured in Forbes’s 30 Under 30 list for Industry and Manufacturing.

Purraffinity has raised $21.5m. It raised $13.9m in a series A funding round this year. A range of corporate investors participated in the round, including The Heritage Group’s venturing unit, HG Ventures. Other investors include venture firms Verve Ventures, Kindred Capital and Acequia Capital.

15 of 17

Founded: 2017
Based: Canada
Funding to date: $15m

German startup Sykell makes reusable containers for packaging. The startup uses bisphenol A-free materials and recyclable monocomposites to make the containers. It also allows food and beverage companies to track their containers’ movements through its reusables-as-a-service platform.

David Mazzanti, CEO, Micharl Kappler and James Cliff founded Sykell in 2021. Mazzanti worked in the technology sector for several years after serving a year as the director of mobile product development at lastminute.com. He was also the senior product manager for product and channel delivery at Vodafone Italy.

In May 2023 Sykell raised $4.8m in growth capital from venture capital platform Collateral Good Ventures, environmental services company Interzero and Germany-based retail and tourism company Rewe Group. Honey Badger Capital, a venture capital firm, also provided funding via convertible notes in 2022.

16 of 17

Uravu Labs
Founded: 2016
Based: UK
Funding to date: $10m

Uravu Labs is an India-headquartered company that produces 100% renewable drinking water. The startup’s technology uses inexhaustible atmospheric moisture and renewable energy sources such as solar and carbon neutral sources of waste heat to produce high quality drinking water.

Uravu Labs was founded by chief technology officer Pardeep Gard, chief operations officer Venkatesh RY, CEO Swapnil Shrivastav and chief production officer Govinda Balaji B in 2017. Balaji spent a year at the National Center of Nano Science and Nano Technology at the University of Mumbai as a research assistant studying 3D modelling and fabrication.

The startup has raised $4.3m. In March 2023 Uravu Labs raised $2.3m in a seed round from Jito Angel Networks and India First fund ZNL Ventures. Other investors include venture capital firms Vesta Ventures, Verso X and Echo River Capital.

17 of 17

Founded: 2021
Based: UK
Funding to date: $3.34m

Wase is a UK-based wastewater treatment startup. The company offers a waste-toenergy technology that boosts energy recovery from non-viable waste streams. Its Microbial Electrolysis Cell technology also generates methane, which can be recovered and used to produce fertilisers.

Wase was founded by CEO Thomas Fudge in 2017. Fudge saw the impact of poor sanitation on children in Ghana which inspired him to form the startup. Fudge was a PhD researcher in the development of decentralised wastewater treatment for four years at Brunel University. He was also a product design manager for two years at It’s The Flash Pack, a technical production company.

Wase has raised $1.6m. In 2022 it raised $1.2m in a seed round with Science Angel Syndicate as the lead investor. Other investors include venture capital firms Elbow Beach and Seedrs.

Tidal Vision uses crab shells to remove pollutants from water

The US startup’s chitosan technology has applications in sustainable water treatment, agriculture and materials manufacturing.

Access to clean water is still a major global problem, with SafetyCulture reporting that almost two billion people drink untreated water or use water from contaminated sources. Water cleanliness and safety are not only an issue in developing countries. Problems with water treatment in the UK, for example, have become a matter of national concern.

The water and sustainability sectors are now turning to startups to find new and more effective ways to treat water.

Enter, the humble crab.

Crabs are a common feature of any coastline, but US startup Tidal Vision says crabs are the answer to safer and cleaner water. This crustacean’s thick exoskeleton holds the key.

Tidal Vision claims that its crab shell chemical formula can provide cleaner, safer and more reliable water treatment. The company manufactures chitosan, a non-toxic biodegradable biopolymer that is extracted from crab and shrimp shells, and fungi.

“We are trying to solve some of the greatest chemistry and pollution challenges facing water treatment in agriculture and material science industries,” says Craig Kasberg, chief executive and co-founder of Tidal Vision.

Chitosan has unique properties that bind to pollutants in water, such as contaminants in agricultural waste. The technology enables more efficient and effective delivery of crop protection and plant nutrition products, says Kasberg.

Its proprietary extraction method of chitosan makes its technology unique, says Kasberg. “Chitosan is a very inconvenient product if it is extracted through simple methods,” he says. “It needs to be modified into a watersoluble form so that it is easier to handle. Our platform technology, called Zale Technologies, enables chitosan to be put into easy-to-handle solutions that are five times the concentration previously possible.”

The founder says its product is the first commercialised zero waste extraction process. It enables chitosan to be extracted at about 75% lower costs than conventional processes.

The company’s Tidal Clear product can be added to existing filtration systems. It increases filterability and can reduce wear and tear on equipment, the company claims. The sludge that is produced as a byproduct can be upcycled into fertiliser and animal feed.

The company also aims to use its technology to make fertilsers, bioplastics, membranes and non-toxic flame retardants.

Founded in 2015, Tidal Vision’s team includes chief strategy officer and co-founder Zach Wilkinson; chief technical officer Wendey Hiester; chief scientific officer Ramesh Raliya.

Kasberg also founded sustainable seafood harvesting startup Alaska Seafood Source. Wilkinson spent five years as a branch manager at financial services company Wells Fargo and served another five years as a technology transfer programme officer at Juneau Economic Development Council in Alaska.

Investing in the circular economy

The circular economy has become one of the most soughtafter sectors for investors. Startups like Tidal Vision are attractive to investors because they aim to improve sustainability across sectors.

“Our agriculture technologies are making a large climate impact by decarbonising the food chain through increasing synthetic nitrogen efficiency to reduce greenhouse gas production in the crop supply chain. Our water treatment division is being used to remove pollutants on 26 billion gallons of water,” Kasberg says.

The global water treatment market is a growing industry. The market was valued at $282bn in 2021, according to Statista. European VC firms have invested $300m into water tech startups in 2022, according to Sifted.

Corporate investment

Tidal Vision has raised $45m over five rounds. Investors include Telus Pollinator for Good, the corporate impact fund of Canadian telecommunications company Telus, and venture capital firms E8 Angels and Pangaea Ventures.

Tidal Vision has used its capital to expand its technologies. “We have reached a stage of full-scale production with our technologies, which enables them to not just be greener and better performing but economical as well,” he says.

“We are at an exciting point in time in the company’s history where we can replicate what we have done in more locations around the world. We’re making tens of thousands of metric tons of our green chemistry solutions per month and we are in a position we where we can grow even quicker going forward than it took us to get here,” Kasberg says.

Tidal Vision has received backing from undisclosed corporate investors. Kasberg says that it’s important for corporate backers to share the same vision that Tidal Vision has.

“Some of our investors are CVCs from large chemical and agriculture companies. It has been important to have corporates who share the same interests as ours, which is the mass adoption of greener chemistries in a range of industries,” he says.

Chemicals hold hope for meeting recycling targets

Using solvents and enzymes to break down plastic polymers looks the most promising way to increase plastics recycling — if it can overcome energy and scale-up challenges

Like many companies, Beiersdorf, the German cosmetics and self-care company that owns the Nivea skin care brand, has set itself an ambitious goal — making sure that, by 2025, 30% of the plastic it uses is recycled.

But, like many companies with such goals, it has a problem. There just isn’t enough recycled material of the right quality available to meet this target.

“There is a technology gap. For certain plastic types, we don’t have truly sustainable technologies at scale yet to achieve the goals that the industries are setting themselves,” says Ascan Voswinckel, head of venture capital at Beiersdorf. “There is a big market for the right technologies – and demand will outstrip supply over the next five to 10 years.”

One of the big hopes for increasing the amount of recycled plastic is moving to chemical recycling. Traditionally, plastics recycling is done through mechanical sorting. But that is not effective in many regions of the world because of the high-level of contaminants in plastics packaging and the lack of adequate waste collection and sorting.

Chemical recycling uses solvents or other processes to break down polymers so that the plastic can be recycled and reused.

“The holy grail for us is [recycling] mixed plastic streams from post-consumer. We do not think this is doable with mechanical recycling. Very likely, a good technology will be in chemical recycling,” says Tony Sun, investment manager of corporate ventures at GC International, the investment arm of Thai chemical maker PTT Global Chemical, one of the biggest plastics manufacturers in Southeast Asia.

Challenges for chemical recycling

The challenge of chemical recycling technology is that it is very early on in its development and fragmented, says Sun. “Most companies claim they have a unique reactor or catalyst, a unique additive to solve these issues. They all have a unique way, but they are so early stage that they are too early to even validate,” he says.

Sun’s venture team decided to work with a fund specialised in chemical recycling rather than investing in a specific technology. It is a limited partner in Dutch growth capital firm Infinity Recycling, which invests in advanced plastics recycling technologies. “We are hoping some of their portfolio can stand out in the longer term,” says Sun.

One of GC International’s investments is in Interface Polymers, a UK-based, University of Warwick spinout, which has developed a polymer additive that changes the properties of commonly used plastics and can help improve the recycling rate.

Chemical recycling has been criticised, however, for being energy intensive and producing toxic byproducts. The challenge for the industry is to find ways to lower the energy needs.

“Today chemical recycling appears to be the more robust option in terms of degrading of material and quality of output, but with the clear challenge of the need to be more energy efficient,” says Voswinckel.

One promising startup that Beiersdorf team has invested in is DePoly, a Swiss startup that has developed a technology that breaks down plastics through a room-temperature chemical reaction, which is an exception in chemical recycling technology because of its energy efficient approach. The company claims the process generates the same quality of chemicals that would have been used for the plastic in the first place.

BASF and Infinity Recycling also committed capital to the startup. “It is a great example of the right group of people coming together on an investor level – contributing expertise and perspectives from venture, the chemical industry as well as brand owners,” says Voswinckel.

DePoly already runs a pilot facility that can process 50 metric tons of polyethylene terephthalate (PET), used in plastic bottles, a year. The next step will be a showcase plant for its technology in Switzerland with a capacity that is 10 times larger.

VC deals in plastics recycling tech by stage (%) 2016-2023

Regulation pushes the market forward

The need to find better solutions for plastics recycling is being pushed by ever-tightening regulations. In 2023 the European Commission moved forward with regulations to reduce plastic packaging. The proposed rules ban plastic bags, require plastic packaging to contain minimum percentages of recycled content and require all packaging in the EU to be recyclable.

The UN also recently proposed a resolution to develop a legally binding treaty to reduce plastic pollution.

Legal challenges are also putting pressure on corporates. Drinks maker PepsiCo was sued by New York state in November 2023 for plastic pollution along the Buffalo River that is allegedly contaminating water and harming wildlife.

Coca-Cola, Danone and Nestle have also been accused by environmental groups of making misleading claims about their plastic water bottles being 100% recycled.

VC deals in plastics recycling tech - median deal size & median post valuation ($m)

The scaling challenge

Observers expect a sharp increase in demand for advanced chemical recycling at scale, which will require investment in large plants. “There is a huge gap between the available capacity of recyclable plastics plants and the demand from the vendors of the amount of recycled content they want to see in their packaging,” says Fredric Petit, co-lead of the Sustainable Packaging Innovation Fund at Emerald, a Swiss venture capital firm specialising in sustainable industrial technology.

Some recycling startups have managed to raise large amounts of capital to build recycling plants. An example is French company Carbios, which has developed an enzyme that degrades plastic and textile polymers for industrial use. It raised €141m through the issuance of new shares in July 2023. It will use the money to build a PET biorecycling plant in 2025.

French cosmetics maker L’Oreal is an investor in Carbios. It worked with the startup to create the first cosmetics bottle made from enzymatic recycling. L’Oreal partnered with Nestle Waters, PepsiCo and Suntory Beverage & Food Europe to help scale Carbios’s technology.

But there are many other startups which will need large-scale funding, and corporations will have role to play in that. This is part of the reason that Emerald set up a dedicated packaging fund in 2022. Limited partners include Nestle, Beiersdorf, German chemical and consumer goods company Henkel and US waste management company WM. The fund, which plans to have between 15 and 20 portfolio companies, aims set up collaboration projects between corporate partners and portfolio companies.

Petit sees growing corporate interest in recycling technologies. Multinational chemical companies SABIC, Mitsubishi Chemical and LyondellBasell have stepped up corporate investment to support scaling up of new technologies. Packaging producers are also showing interest in acquiring recycled content.

“The brand owners and packaging converters want to know what kind of technologies are being developed; they want to know for what kind of polymers these kinds of technologies apply; and they want to guarantee access, too. It is unlikely that they will invest themselves in large chemical recycling facilities, but they want to secure recycled content that they can use for their products,” says Petit.

The fund’s investment focus is in two areas: new bio and fibre-based materials to replace fossil fuel-based feedstock for plastics manufacturing, and mechanical and chemical recycling. It also looks at how to improve the functionality of alternative packaging materials such as paper as well as improving the design of packaging for end of life or reuse.

“The brand owners and packaging makers take this end of life into account more than any time before, because they know this is a parameter by which their customers will make a purchase decision,” says Petit.

H2Overlooked: water scarcity leads to flood of tech solutions

Water has been the Cinderella of sustainability investment, but as supply comes under strain, investors see more value in the sector.

Despite the growing sense of urgency for sustainable technology solutions, water has remained a distant, overlooked concern relative its carbon and energy counterparts. It’s historically been an abundant and cheap resource that people take for granted.

Not for long.

Reservoirs and natural bodies of water are at historic lows across multiple continents. This reduces people’s direct access to clean water as well as for agriculture and industrial processes. Water levels continue to deplete as demand for it intensifies.

“Water is not expensive today. I think it’s going to be expensive in the coming years. I think it’s going to be very expensive,” says Ginger Rothrock, senior director at HG Ventures, the corporate venture capital arm of the Heritage Group, a US company that owns manufacturers of materials and chemicals.

“People don’t understand the food-water nexus and the energy-water nexus. It’s a very interconnected system. These trends exist globally, and so I think scarcity is going to be more pronounced. It’s going to affect much, much more than people understand today.”

For the industrial sector, which – depending on the source – takes up anywhere between 10% and 40% of the world’s water supply, there have been no big changes in wastewater processing over the past century. Contaminated water continues to be hauled off-site to be dumped or treated rather than reused.

The opportunity for disruption is abundant, but incumbents tend to be driven by inertia, and the competition has been against the notion that if the system is not that broken, why spend millions to fix it.

Part of the problem is what society has always been told about water: it is cheap, regulated and abundant. We’ve done a bad job of communicating just how crucial it is, and how vulnerable we are without it.

“Nothing else matters first. Everybody takes care of water first,” says Tom Ferguson, founder and managing partner of Burnt Island Ventures, a water-focused VC firm. Those who don’t have it are compelled to prioritise getting it ahead of everything else, and for those who do have it, it tends to be the first thing they interact with every day.

Burnt Island’s website puts it succinctly, and somewhat terrifyingly: Water is the medium through which we will feel the effects of a warming Earth.

Bringing water into the circle of confidence

Investors tend to default to investing in sectors they can easily assess. The issue is no one tends to understand the water industry.

“If you look at it through the investment lens, people push out their circles of confidence, especially within the venture world, when something comes into vogue. Nobody’s ever had a good reason to bring water into their circle of confidence,” says Ferguson.

Another hurdle lies in the difficulty in ascribing value to water in the first place. Building a business around a resource that is widely regarded as a fundamental human right is no mean feat.

The price of water, and water technology, is dependent on a whole gauntlet of factors: What compounds are in it? How enriched is it? What level of scarcity is there in the region? What do the regulations allow? What are the historical utility rates in the region? What is the water meant for? What is the customer’s ambition around their branding and messaging around sustainability?

“If I’m making electricity from one power source over here, it’s very easy to find the value of that unit of energy in a welldefined marketplace. Not with water,” says Alex Rappaport, CEO of Zwitterco, a startup manufacturing non-fouling membranes for on-site wastewater filtration.

What has been changing the investment landscape is the growing number and quality of entrepreneurs in the water space, which ramped up in the 12 to 18 months leading up to Ferguson launching Burnt Island in 2020.

“Better people build better companies. We’ve always had good founders, but they’ve always been slightly too few and far between. That is now no longer the case. There are really excellent founders all over the place in water,” he says.

VC backed deals in watertech 2012-23

New technologies in focus

Much of the capital investment in water has been in technologies such as desalination, particularly in regions like the Middle East where fresh water is hard to come by. Now, a much wider range of water tech solutions are in demand. Companies with the right technology and execution can access long-term commercial contracts.

But real time or automated monitoring of water remains a big problem.

“Tell me what’s in my water in real time. Very, very difficult problem, but a huge holy grail if and when that can be done,” says Ferguson.

Beyond just monitoring, software-led solutions are valuable, not just because they tend to be scalable and disruptive to legacy industries but because they will have a large market among consulting engineers who advise on upgrading water infrastructure.

Wastewater has always been a large byproduct of industry, and new industries are set to increase wastewater streams. The rise in synthetic biology will produce more cellular and organic waste. Renewable gas – and the anaerobic digesters that make it – also produce waste. At the same time, landfills can’t take as much as they have done because of high levels of methane and other gases.

Opportunities for recycling water on-site and for decentralised systems have grown, as have the prospects for harvesting wastewater for resources to be used in other complex supply chains such as for metals like copper or lead for use in batteries.

A focus on PFAS, or “forever chemicals”, has also exploded in recent years as new information, and even Hollywood movies, have shone a spotlight on their presence in water supplies. Shifting regulations and the spectre of legal action have driven up customer demand for technology that can capture and destroy them.

Sticky contracts make water an investable proposition

Having the right team in place – with not just scientists but experts who know how to take something from the lab to the commercial space – is especially crucial in hard tech. For the right technologies, commercial contracts tend to be long.

“You have to get your product right, you have to have your supply chain, you have your regulatory piece. But once you’ve got that, you can get the legal monopoly that comes along with IP. These tend to be very sticky contracts and that competitive moat can widen over time, so it makes it an attractive investment opportunity,” says Rothrock.

For Zwitterco, which has both HG Ventures and Burnt Island on its cap table, proving the viability of its filtration technology – which would, in theory, halve customers’ costs relative to the industry-standard haulage to a multi-acre treatment plant – was the biggest hurdle.

“Developing a new membrane process is a village effort. It takes not just your company and not just the end user, it also takes the engineering company, the solutions provider, who’s going to end up fabricating and putting all the different systems together into a complete offering for the end user,” says Rappaport.

Once the first commercial agreement was made, it went from receiving grant and seed funding to larger VC money in the tens of millions.

Serving municipal customers – and dealing with water for human consumption – is a more complicated proposition for many companies. Their procurement processes are different, and their requirements as a public sector body tend to be more complex. But once those contracts are made, they tend to last for a long time.

“If you get really good at [municipal] RFPs [request for proposals], because nobody wants to do them, you win them all. And once you’re installed, you never get uninstalled,” says Ferguson.

Rising tide

Even if the wider body of investors are slow on the uptake, potential customers need less convincing to see the value in upgrading their water technology. Sustainability and green credential are all people want to talk about, says Rappaport.

“I have never in five years had to walk into a room and try to explain to someone why it’s a good idea to think about advancing their water treatment. Never once. More often than not, it’s people saying: I know this is important, I want to be the hero of my industry,” he says.

© 2024 Mawsonia Ltd. All rights reserved.
test reg


Not yet subscribed?

See your subscription offers here