HomeFundingPolestar Capital extends its Circular Economy Debt Fund to €187 million

Polestar Capital extends its Circular Economy Debt Fund to €187 million

Today, Dutch investment firm, Polestar Capital has secured new backing to add €85 million to its Circular Debt Fund (PCDF), bringing the total to €187 million – all dedicated to fueling the transition to a circular economy. 

Transitioning towards a circular economy is one of the key parts of creating a more sustainable society. It entails developing an economic and societal system based on resuing and regenerating goods and resources and it’s picking up speed.

Impact investor Polestar Capital, founded in 2012, is on a mission to fuel the transition – aiming to back disruptive innovators creating new solutions for a circular future. The firm’s Polestar Capital Circular Debt Fund (PCDF) has just secured new backers, bringing its fund total to €187 million.

In a new €85 million investment, the Dutch state impact investor Invest-NL and the insurers Onderlinge s‘Gravenhage and De Hoop have already invested, the Province of Limburg has made its investment decision but is still in the process of formalizing its participation. The fund counts the Dutch pension fund Detailhandel as its anchor investor.

The PCDF invests in innovative circular projects with the potential to create a worldwide systemic ecological impact, both by waste reduction and recycling and by the replacement of fossil fuels.

Jan-Willem König, director of Polestar Capital: “The circular companies that the PCDF finances are capital intensive and take time to realise positive cashflows. This means they require relatively large sums of patient capital. Unfortunately, we don’t have the luxury to be patient in scaling sustainable circular technologies, as we need to reduce our emissions and pollution rather sooner than later. The participation of the new investors in the fund will be of great support in that regard, by further enabling the fund to accelerate the transition to a circular economy.”

The aim is to reduce the use of virgin resources, reduce carbon emissions, and create a more sustainable life on earth.

Often, these projects have difficulty raising enough funding. Banks usually find such projects too innovative, and venture capitalists, they are generally too capital-intensive to finance fully with equity. By closing the funding gap, PCDF allows circular production companies to prove their technologies and business models on a commercial scale.

Tim van Vledder, senior Investment Manager at Invest-NL: “Circular scale-ups really need enough financing to accelerate their growth and, by extension, the transition to a circular economy. It is one of the crucial ingredients that the PCDF supplies, by mixing financing with knowledge of the market. A lot of investors don’t have the knowledge or mandate to operate in this crucial market segment. We expect a fruitful collaboration with all the stakeholders in PCDF.”

This fund has a goal to encourage innovative solutions to grow, and, also encourages other financiers to trust in and further finance the scaling of impactful technologies.

Henk Groot, CIO of the pension fund: “A year ago, we have put the Netherlands on the map internationally as the first country to open a fund specifically geared towards solving the funding gap for circular economy projects. The onboarding of new investors in this funding round shows how groundbreaking this fund is. Everyone realizes how important it is to make the transition to a circular economy, these new investors help to make sure that this is not just a goal, but a work-in-progress.” 

Closing the funding gap is one of the key reasons the new investors got involved, reflecting a changing appetitive for green technologies, sustainability-led innovation and circular thinking within the investment space.

Seada van den Herik, managing director of insurer Onderlinge ’s Gravenhage: “As a mutual insurer we, together with our members, distinguish ourselves by directing attention to societal welfare. PCDF offers us the opportunity to invest in necessary societal changes to make sure welfare continues improving. This is a perfect fit with our mission: Growing older happily, together.”  

Gilbert Pluym, managing director of reinsurer De Hoop: “Our mission is to allow everyone to obtain life insurance, even if they have a medical condition. The social impact we try to make with our products also translates to our investment policy, where we want to invest with more than only financial return in mind. Our participation in the PCDF is an expression of this policy.”

Maarten van Gaans-Gijbels, deputy for Energy and Climate of the Province of Limburg: “Limburg hosts important innovative ecosystems in the circular economy, notably the Brightlands campuses. The investment of Limburg in PCDF contributes to the Dutch government’s ambition to be fully circular by 2050, by making sure that financing is available for innovative circular economies from Limburg and beyond to scale up and generate the necessary impact.”

Patricia Allen
Patricia Allen
is the Head of Content at EU-Startups. With a background in politics, Patricia has a real passion for how shared ideas across communities and cultures can bring new initiatives and innovations for the future. She spends her time bringing you the latest news and updates of startups across Europe, and curating our social media.

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