Recycled cotton company Recover raises $100M in funding led by Goldman Sachs

Dive Brief:

Taking a step toward creating a more low-impact clothing industry, recycled cotton fiber company Recover has raised a $100 million minority equity investment led by Goldman Sachs Asset Management, according to a press release. Goldman Sachs has invested alongside majority shareholders Story3 Capital Partners.
Recover, which creates recycled cotton fibers and blends for new apparel from textile waste, intends to use this investment for global expansion and increased production capacity. It currently works with companies such as Revolve, Lands’ End and Primark, per the release.
“Recover is a leading disruptor in the apparel and textiles space with much-needed sustainable solutions grounded in materials science. We’re excited to invest in Recover’s growth to accelerate scaled production and the continued development of its technologies,” Letitia Webster, managing director and chief sustainability officer of Goldman Sachs Asset Management Division, said in a statement.

Dive Insight:

Goldman Sach’s investment shows the increasing interest in dealing with a large environmental problem — post-industrial and post-consumer textile waste from the fashion industry — while still creating a way for businesses to produce.

Textile waste in the U.S. largely comes from discarded clothing, with around 11 million tons of textile waste put into landfills in 2018 alone, according to data by the United States Environmental Protection Agency. Textile production is estimated to release around 1.2 billion metric tons (about 1.3 billion U.S. tons) of greenhouse gas emissions per year, according to the Ellen MacArthur Foundation.

Recover uses some of that textile waste to create a proprietary cotton fiber and fiber blend, resulting in a more circular system. The company estimates the new funding will help it produce 350,000 metric tons of recycled cotton fiber per year by 2026, per the release.

The new capital values the company at $1.1 billion, according to multiple media reports. Press representatives from the company declined to comment on the valuation when asked by Retail Dive.

Fashion retailers are taking notice of the negative impact of textile waste as well. The RealReal, Rent the Runway, Fashionphile and others are part of a new organization called the American Circular Textiles policy group, seeking to tackle textile waste and reuse, according to Women’s Wear Daily.

The retail industry is inherently bad for the environment, and creating a more sustainable system isn’t easy. Recover’s website states that its recycled fibers can be “recycled for several cycles”, but do eventually degrade over time at varying rates based on what other fibers they are blended with.