“$150 million is committed to India from the second fund,” Kaplan told ET. He said the fresh capital is being allocated from a $300 million fund the firm is in the process of raising.
Kaplan, who is based in Singapore, earlier served as director of sustainability at Walmart’s Bentonville headquarters before turning to a career in investing.
Coca-Cola, Dow Chemicals, Procter and Gamble, International Finance Corporation, and Proparco are among those making commitments to Circulate Capital’s second fund.
Circulate Capital has raised $500 million since its inception in 2020.
“We are backing SME and family businesses with a 10-20 year track record in recycling,” said Kaplan. “They are mostly profitable and have revenues between $20-30 million.”
Kaplan’s fund tasted success in some of its early investments. Among its portfolio companies in India is Lucro Plastecycle. Hindustan Unilever Ltd picked up a 14.3% stake in the company in March last year. Srichakra, one of its other portfolio companies, supplies recycled bottles to Coca-Cola and Pepsi.Kaplan said Circulate Capital’s investee companies in India are focused on plastics recycling, but the new fund would explore other areas where opportunities for recycling exist.
“One big area is around critical materials,” he said. “We have seen a major tailwind with recent conditions around metals— aluminium, copper, rare earths—where there’s a massive race to extract as much as possible outside of China, which controls a lot of those value chains.”
“We see the opportunity for recovering these materials already extracted from the environment that are trapped in our devices or our cars or refrigerators,” he said.
According to Kaplan, growing demand for batteries and electronics has necessitated the need for companies to diversify their supply chains from China.
“Recycling is a key hedge against that risk,” he said.