Polestar Capital’s Circular debt fund funding news – Netherlands-based Polestar Capital’s Circular debt fund (PCDF) Raises €43Million in Debt Fund

A further €13 million has been committed by Realdania, Oost NL and Polestar Capital itself. Regional Development Agency Oost NL invested in PCDF from Participatiefonds Oost NL and Perspectieffonds Gelderland, a fund from the province of Gelderland managed by Oost NL.

To bridge the funding gap for Dutch circular SMEs, the fund addresses the mismatch between demand and supply of capital for sustainable technology companies. The fund specifically targets circular innovators that want to realise a first-of-a-kind commercial production facility, a phase usually too innovative for banks and too capital intense for venture capital and subsidies alone.

By bridging the funding gap for these sustainable production companies, the fund enables the further upscaling of their circular technologies and business models, and the disruption and replacement of traditional value chains with more sustainable ones.

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The fund has now reached €240 million, that it will use to finance 20 to 30 companies in the demonstration phase of their business, who will use the financing to establish their technologically innovative manufacturing facilities so that production cycles become circular.

The fund has set clear impact objectives for its investments, such as the reduction of waste and CO2-emissions, and increasing the use of circular and more sustainable materials and products.

Marjut Falkstedt, Chief Executive of the EIF said, “Circularity is still an underfunded area when it comes to innovation. We can achieve a lot by better managing resources and products, and integrating circular thinking in our production processes. We’re happy to partner with Polestar Capital and build on their network in this particular field of expertise."

Ulrike Kostense, senior investment manager at Invest-NL said, "We are thrilled to contribute to the Polestar Capital Circular Debt Fund, which aligns perfectly with our commitment to fostering sustainable innovation. By solving the funding gap for innovative circular production companies, Polestar Capital finances innovation and accelerates the transition to a circular economy, creating both positive environmental impact and economic benefits,".

Wendy de Jong, CEO of Oost NL, added: “Scaling circular start-ups is key to transition to a sustainable society. We need to invest in our ability to reduce waste, conserve resources, and promote sustainable economic growth reusing materials and products. This requires capital, also in the form of debt, which is scarce in the current funding environment. Polestar Capital is a knowledgeable partner and PCDF will be a natural co-investor in circular scale-up companies in Gelderland and Overijssel.”

Chief Investment Officer Kenneth Lillelund Winther of Realdania said, “Our mission-related investments have a dual purpose, both to ensure a philanthropic impact and an economic return. This approach harmonizes incredibly well with circular thinking. It is not only good for the climate that companies in, for example, the construction industry become better at recycling resources. It can also improve their competitiveness, because circular companies can reduce their costs by using fewer materials, increasing recycling, and reducing their waste,”.

Daan van Kassel, Fund Director of PCDF: “The expansion of the fund comes at a perfect timing. It can take quite some time to make innovative circular production projects financeable for the fund, and we are now concluding transactions with the companies that we first engaged with in or before 2022. This expansion enables us to start new financing processes with another 3-6 circular innovators in order to bridge their funding gap when they develop a first production facility at commercial scale”

About Polestar Capital

Founded in 2009, Polestar Capital is a Dutch impact investor that has the mission to bridge the funding gap for climate action, by redesigning and stretching the ways in which societal funding needs can be aligned to meet investor demands. Polestar Capital is currently investing ca. €2 Bln via 3 thematic investment vehicles that all in different ways contribute to environmental sustainability.