Mar 22, 2023
by James Roberts
Circular Tech Company Circ Closes Another Round of Funding
by James Roberts
Mar 22, 2023

“We already have all the clothing we need to make all the clothing we’ll ever need,” says Peter Majeranowski, CEO of Circ, a technology company that’s developed a way to return textiles into their raw materials. He’s not wrong. More than 100 billion garments will be produced this year alone. That’s enough for every American to have over 300 new garments each in 2023. Of that, 92 million tons is destined for landfill.

The opportunity for circular technologies is pretty obvious. Less than 1 percent of garments thrown out this year will be recycled into other garments or textiles. That number could be so much higher. But because 60 percent of clothing produced is made with plastics, blended fibers and chemical dyes, the recycling process can be tricky. It can be labor intensive (and therefore, not financially worthwhile). Or produce a lower quality material, which can only be downcycled into carpets or thermal insulation. There has been some success of small scale chemical separation and recycling, but scaling up has always been the big sticking point. So far, it’s been somewhat of a pipe dream.

In jumps Circ. The Virginia-based company has developed a patented hydrothermal process that can split blended garments into its constituent raw materials. Having raised $30 million USD in July last year, it has just closed a $25 million USD Series B round of funding, to help the business scale up and deliver its first consumer products to market. Participants in the latest round include the e-commerce group Zalando, Fortune 500 packaging company Avery Dennison, and Korean manufacturing corporation Youngone.

Circ’s simple aim is to “entirely eliminate the demand for raw ingredients needed to make clothing, by creating new clothes entirely out of old ones.” The fashion industry doesn’t need new materials. It needs circular systems that work at scale; the same mass industrial scale that the current mode of production runs at. By removing the need for virgin materials, we reduce the amount of water and toxic chemicals used, and we reduce the amount of CO2 that’s released into the atmosphere. Circ seems confident that it has found a solution. This latest round of funding will help it continue to grow, scaling up its technology to industrial-level facilities.

Zalando, one of Europe’s largest e-commerce platforms, sees great promise in Circ. “With the investment in Circ, we are contributing to an emerging infrastructure for circularity that will eventually help the fashion industry at large, to move away from a take-make-waste model,” said Zalando co-chief executive officer David Schneider. “We want to be a sustainable fashion platform with a net-positive impact for people and the planet, and we are excited about the potential of Circ to contribute to this vision.”

The investment from Zalando follows a string of other investments in similar textile tech companies. In 2021, it invested in Infinited Fiber, the Finnish company behind the cellulose textile fiber Infinna. And last year, it put funds into Ambercycle, a US startup that regenerates end-of-life garments.

While these are positive moves, there are some inherent issues with the retailer. Namely, its size. Zalando has more than 50 million active users in 25 European markets, and stocks more than 7,000 brands. A quick search for “Mens T-shirt” on the Zalando UK site pulls up 17,179 items. That’s almost twice the amount that ASOS, the British online marketplace, stocks. In short, Zalando is part of the problem of the over-consumption and over-production that leads to the tons of landfill-destined garments.

When we reported on Circ’s last round of funding, we raised our doubts and concerns about Inditex’s involvement with this project. Inditex is the company behind the likes of Zara, Bershka and Massimo Dutti. Investments like these can be an easy way to divert eyes away from controversies like working conditions and poor pay.

But, as Circ chief executive officer Peter Majeranowski says: “Transforming the fashion economy requires leadership from influential players in the textile industry, the financial community, as well as technology innovators.” Big money is needed to impact big change.

Read more on how Circ is using its funding over on its website. And for more big investments in textile innovators, check out BYBORRE’s latest $18 million USD funding.