ESG/Sustainability Investment and M&A Tracker
A growing number of investment rounds are bringing sustainability-centric endeavors and more often than not, sustainability-focused tech, to the fore, as consumers and shareholders, alike, continue to focus on the sizable role that retail – including fashion industry – plays in the larger climate crisis. With rising consumer awareness and resulting demands for action and transparency on this front, investors increasingly taking environmental, social, and governance (“ESG”) factors into account when making decisions, and lawmakers across the globe pushing for climate-centric legislation in light of rampant greenwashing, we have compiled a (running) timeline of funding and M&A to provide a broad overview of sustainable investments in fashion and the broader retail space, and shed light on what the trajectory of this segment of the market looks like more generally …
Mar. 30, 2023 – Gen Phoenix Raises $18M for Recycled Leather Biz
Gen Phoenix, which boasts the title of “the leading producer of sustainable recycled leather at scale, raised $18 million in a new round led by venture capital firm Material Impact, with participation from Dr. Martens, InMotion Ventures, the investment arm of Jaguar Land Rover, and Coach and Kate Spade owner Tapestry. The funding round also includes existing investors ETF Partners and the Hermes GPE Environmental Innovation Fund. The company says it will use the new cash to “bolster growth for the business and further efforts to meaningfully tackle the world’s waste problem.” In particular, it will be focused on “reaching new partners, deepening current relationships, and scaling product innovations.”
Mar. 21, 2023 – Inditex to Invest €15M in Regenerative Nature Fund
Zara-owner Inditex will invest €15 million in non-profit Conservation International to expand and scale the work of the Regenerative Fund for Nature. Launched in 2021 by Conservation International and Kering, the initiative aims to “transform 1 million hectares of crop and rangelands into regenerative agricultural systems by 2026.” Inditex says that the investment “will work to enhance sustainability in the fashion industry, which is fundamentally dependent on agriculture for its raw materials.”
Mar. 7, 2023 – tex.tracer Raises €1.7M in Growth Capital
Tex.tracer has raised €1.5 million ($1.59 million) in growth capital from ROM InWest, HearstLab, Joanna Invests, and angel investors. The Amsterdam-headquartered SaaS platform “unlocks insightful supply chain information” for fashion/apparel brands and retailers, enabling them to access “verified data so they can work with suppliers to reach their sustainability goals” and ensure compliance with “upcoming rules and legislation.”
Mar. 1, 2023 – Circ Raises $25M in Latest Round
On the heels of closing a $30 million-plus series B round in July 2022 (led by the Bill Gates-founded Breakthrough Energy Ventures and with participation from Zara owner Inditex), Danville, Virginia-based Circ has raised $25 million in a new round led by Zalando with participation from Avery Dennison and Korean outdoor apparel and footwear manufacturer, Youngone. The company – which developed a “technology system that returns clothes back to the raw materials” – will use the new cash to accelerate its engineering expansion and bring its first consumer products to market.
Mar. 1, 2023 – SESAMm Raises $37M in Series B2 Round
SESAMm has raised €35 million ($37 million) in a Series B2 round co-led by Elaia, a deep tech VC firm, and Opera Tech Ventures, the venture capital arm of BNP Paribas. A leader in natural language processing (NLP), which is a field of AI, SESAMm enables companies to track relevant ESG data by “generating insights for controversy detection on investments, clients and suppliers, ESG, and positive impact scores, among others.” The new funding will enable SESAMm to “further expand into U.S. and Asian markets, support technology development to generate AI-powered ESG and sentiment analytics, and hire key talent across sustainability, technology, sales, and marketing.”
Feb. 1, 2023 – Ever Dye Raises $3.7M in New Round
Ever Dye has raised 3.4 million euros ($3.7 million) in funding in a round co-led by Maki.vc and Asterion Ventures with participation from Entrepreneur First. The French startup says it will use the new funds to scale and commercialize its sustainable dyeing process and help the textile industry to lower emissions. “With Ever Dye’s new, novel method, fabrics can be dyed five times faster with fifteen times less energy consumed and without any petrochemicals involved. Our unique green solutions fully fit in existing industrial infrastructures and will reduce the GHG emissions of the textile industry, in addition to conserving water,” Ilan Palacci, the CEO and co-founder of Ever Dye, said.
Jan. 13, 2023 – Grounded People Apparel Receives $2.5M Capital Injection
Grounded People, an emerging sustainable shoe startup, raised $2.5 million from Vancouver-Based Right Season Investments Corp to “expand the company’s involvement in the sustainable fashion movement, and expand their vegan footwear line.” In a release, Grounded People, which was launched in 2020, stated, “The sustainable footwear market is strong and Grounded People is in a strategic position to capitalize with a dedicated consumer base that’s shown high interest in integrating with the brand’s mission to reverse the harmful environmental impact of the global fashion industry.”
Jan. 12, 2023 – Sortile Closes $1M Pre-Seed Round
Sortile, a startup that touts itself as “empowering the textile industry with solutions to unlock the current challenges for scaling textile recycling,” finalized its seed round, raising $1 million, with participation from Hearst’s Level Up Ventures. Founded in 2021 by Constanza Gomez abd Agustina Mir, Sortile’s AI-driven and data analytics solutions are “designed to enable the fashion industry with textile-to-textile recycling and foster circular fashion with NIR spectroscopy and machine learning to efficiently identify fiber, and providing data analytics capabilities, giving visibility to the waste stream.”
Nov. 3, 2022 – Textile Startup Smartex Raises $24.7M in Series A
Smartex closed a $24.6 million Series A round led by Lightspeed Venture Partners and Tony Fadell’s Build Collective on the heels of the Porto, Portugal-based startup winning the 2021 Web Summit PITCH competition. Other investors include H&M Group, DCVC, SOSV’s HAX, Spider Capital, Momenta Ventures, Bombyx Capital Partners, Faber, and Fashion for Good. Founded in 2018, Smartex uses hardware-enabled, machine-vision-driven software to detect defects in textiles are they are being manufactured, enabling companies reduce textile waste, CO2 emissions, energy, water, production time, and capital expenditure by automatically shutting down production in order to prevent the waste of materials. The company plans to use the new cash expand its business to new markets, and to develop additional product lines designed to aid manufacturers and fashion brands in improving control of their products while increasing textile quality and traceability.
Oct. 10, 2022 – Mango Invests in Textile Resale Platform Recovo
Spanish fast fashion company Mango has invested in Recovo, a B2B marketplace for brands looking to buy and sell leftover – or deadstock – fabrics by way of a convertible note entered into by its StartUp Studio. Barcelona-based Recovo, which was founded in 2021 by former Inditex employees, Mónica Rodríguez and Marta Iglesias, and former Tous employee Gonzalo Sáenz, will use the new funds to expand operations on its platform and its model more broadly, the latter of which sees it use “technology, traceability and community involvement to promote a circular economy.” The terms of the deal have note been disclosed.
Sept. 14, 2022 – Patagonia Crafts New Ownership Structure
Since Patagonia’s founding in 1973, Yvon Chouinard and his family have been its owners. Now, almost 50 years later, the Chouinards are transferring all ownership to two newly created entities in an effort both to cement the company’s values in its operating structure and step up its fight against the climate crisis. All voting stock (about 2% of the total) is now controlled by the Patagonia Purpose Trust, while the other 98% is under what’s called the Holdfast Collective.
Aug. 9, 2022 – Stella McCartney, Collaborative Fund Launch $200M Fund
Stella McCartney and Collaborative Fund have joined to launch a $200 million fund to invest and support sustainability-focused ventures. Called Collab SOS, the fund will target companies in the fields of decarbonization, food and agriculture, and materials solutions that are raising Series A or B rounds. In a statement, McCartney said of the fund, which also has LVMH backing, “We’ll incubate these technologies, I’ll put them on my runway and then, when they’re ready and the price point is right, we can roll it out and I can say, [to LVMH chief executive Bernard] Arnault, let’s do this.” The funds first investment was in Bolt Threads, the maker of Mylo mushroom leather.
July 12, 2022 – Start-Up CIRC Raises $30M in Series B
Zara-owner Inditex has participated in a $30 million Series B funding round for circular fashion startup CIRC, led by the Bill Gates-founded Breakthrough Energy Ventures and with additional investment from Milliken & Company and Lansdowne Partners. The 11-year-old textile recycling company, which uses proprietary technology to return clothes to the raw materials from which they were made, says it will use the new cash to “complete its engineering work for larger-scale facilities while continuing commercial launches with key partners, [and to] add core team members in engineering, R&D, management, and business development.”
July 6, 2022 – Simplifyber Raises $3.5M in Seed Round
Touting itself as the creator of “the world’s first fully-molded garment and shoe uppers made directly from a cellulose-based liquid,” Simplifyber, Inc. closed a $3.5 million seed round led by At One Ventures. The company, which was co-founded by Maria Intscher-Owrang, a design veteran of Vera Wang, Calvin Klein, Alexander McQueen, Dirk Bikkembergs, and Edun, says that it has “developed a novel approach to clothing and accessory manufacturing that removes traditional spinning, weaving, cutting, and sewing and replaces it with a sustainable, less resource-intensive process, and fully biodegradable solution – cutting out 60% of the steps and reducing the 35% of materials in the fashion supply chain that ends up as waste.” The company will use to funds to scale its its additive manufacturing technology to “bring economically competitive biodegradable garments to market.”
June 30, 2022 – Chanel-based Evolved by Nature Raises $120M in Series C
Evolved By Nature, the company creating a proprietary library of molecules from natural silk protein, closed a $120 million Series C financing round to “accelerate development and commercialization of [its] Activated Silk™ molecules and fund the completion of its state-of-the-art production facility.” The round was led by Teachers’ Venture Growth part of the C$242 billion Ontario Teachers’ Pension Plan Board, with participation from existing investors including Mousse Partners, Jeff Vinik, The Kraft Group, Roy Disney, and Emerald Development Managers. (Existing investor Chanel, which took a minority stake in the company in 2019, did not participate in the Series C.)
June 28, 2022 – Supply chain startup Circulor Raises $25M Series B
Circulor, which uses blockchain technology to map supply chains for companies “pursuing greener, more sustainable production,” announced a raised $25 million Series B round, led by Westly Group, with participations from the venture arms of Volvo, Jaguar Land Rover, and BHP Group. “U.S. industry is increasingly interested in not just origin, but also demonstrating ESG performance because the SEC has made clear that the greenwashing and war of glossy brochures isn’t good enough,” Circulor CEO Douglas Johnson-Poensgen told Reuters, citing regulatory pressure from the U.S. Securities and Exchange Commission. Johnson-Poensgen stated that Circulor is planning for an initial public offering “in due course.”
June 13, 2022 – Recover Raises $100M in Goldman-Led Round
Recover, a materials science company and producer of “sustainable, premium recycled cotton fiber and cotton fiber blends,” announced that it has closed a new $100 million minority equity capital investment led by the Sustainable Investing business within Goldman Sachs Asset Management (Goldman Sachs). Goldman Sachs is investing alongside majority shareholder STORY3 Capital Partners. Recover – which counts Primark, Inditex, C&A, Revolve and Lands’ End as clients – will use the investment to accelerate its global expansion and production capacity, allowing more rapid adoption of sustainability initiatives by leading brands and retailers.
June 8, 2022 – H&M Group and Lululemon Lead Investment in Climate Fund
H&M Group and Lululemon are among the leading investors in a Fashion Climate Fund spearheaded by nonprofit Apparel Impact Institute. The $250 million fund aims to “support new programs and solutions with a structured pipeline for getting from pilot to scale,” Apparel Impact Institute stated in a release. “We believe it provides a powerful mechanism to overcome the challenges of getting new solutions implemented by the industry, and thereby accelerate the progress on climate action.”According to Axois, the fund has “attracted $40 million from H&M Group and Lululemon, plus the H&M Foundation and the Schmidt Family Foundation,” noting that further lead partners are expected to each invest a minimum of $10 million over the next eight years.
May 4, 2022 – Kering Invests in Alternative Leather Startup VitroLabs
Gucci-owner Kering is one of the investors in a $46 million Series A round raised by VitroLabs, along with actor Leonardo DiCaprio, agriculture-focused VC Agronomics, Bestseller’s Invest FWD innovation arm, Khosla Ventures, New Agrarian, and Regeneration VC, among others. California-based VitroLabs, which makes cellular-cultivated leather that “replicates the structure of animal hides,” will use the funding to scale-up its operations and expects to start pilot manufacturing this spring.
“At Kering, a chapter/pillar of our sustainability roadmap is dedicated to sustainable innovation and actively looking for alternative materials that can reduce our environmental impact over the long term is part of the solutions we have been exploring for years. We believe that innovation is key to addressing the sustainability challenges that the luxury industry is facing, which is why we are very interested in the potential of biomaterials such as cultivated leather,” Marie-Claire Daveu, Chief Sustainability and Institutional Affairs Officer at Kering, said in connection with the finding announcement.
April 27, 2022 – Higg Raises $50 Million in Series B
Controversial sustainability insights platform for the consumer goods industry Higg has raised $50 million in a Series B funding round. The funding is co-led by technology growth investor Silversmith Capital Partners and Tom Steyer and Katie Hall’s Galvanize Climate Solutions, along with participation by Series A partners Titan Grove and Buckhill Capital. With close to 50,000 brand and manufacturer users in 100+ countries, Higg says that it “enables continuous improvement of supply chain sustainability—across not only carbon but water, energy, and labor impacts as well.” The new cash will accelerate Higg’s “delivery of innovative technology solutions and its rapid expansion into new consumer goods categories.”