Plastics are so 1950s. “Everyone’s coming to the idea that we need to rethink the traditional polymer and plastic economy, which developed in the 1950s and has remained fairly static up until now,” says Archipelago Ventures’ Lucy Mortimer.
“We’re in this really interesting period of innovation where the number of patients being filed for this particular sector, let’s call it broadly circular economy, is seeing exponential growth.”
Mortimer, who has an environmental finance background, and Justin Guest, a chemist by training, launched Archipelago Ventures in 2020 to seize the opportunity and reduce emissions. The UK-based early-stage climate fund invests in materials innovations that enable a truly circular economy, from new chemistries that can replace fossil fuel inputs to enzymes that deconstruct composite textiles and AI-powered sorting systems that can distinguish between a nylon six carpet and a nylon six-six.
“What we look for are technologies that can take a waste stream that is undervalued and give it more value,” Mortimer explains on the latest Agents of Impact podcast. “If you can get more value out of a ton of plastic waste, there’s more rationale for recycling it, and therefore there’s more rationale for collecting it.”
Archipelago’s portfolio spans the entire lifecycle of materials. One company the firm invested in extracts replacement chemicals from lignin, a byproduct of the pulp and paper industry, to substitute for fossil-derived inputs. Others use enzymes to separate blended textiles into reusable natural and synthetic fibers.
A growing category of investments focuses on the enabling infrastructure needed to identify and sort waste streams. Archipelago backs technologies ranging from chemical tracers embedded in textiles to AI-enabled spectral analysis systems capable of distinguishing materials that require different recycling pathways.
“You can’t recover and process any material if you can’t identify what it is,” says Mortimer. “Technologies that can either sort materials or that can aid identification of materials,” she says, are critical to unlocking economic value from waste.
A new model for emerging managers
Archipelago embraces innovation not just in its investments, but in its approach to capital raising and deployment.
The firm launched into a difficult fundraising environment shaped by geopolitical turmoil and investor caution. To add to the challenges, Mortimer and Guest are first-time managers. Rather than waiting for a traditional fundraise to materialize, Archipelago created the Circular Plastics Accelerator, a single-investor vehicle supported by the Waste and Resources Action Programme, or WRAP, a UK-based climate nonprofit.
“Instead of thinking, this is too hard, we challenged ourselves to find a new model that would enable us to bring those LP commitments into investments in a different way,” says Mortimer.
The accelerator helped establish a track record and seeded investments that later informed the launch of Archipelago’s UK venture fund. Builders Vision, the family office founded by Walmart heir Lukas Walton, provided anchor capital.
Now Archipelago is experimenting with another unconventional idea: collective diligence.
The approach brings prospective limited partners together in a common process led by anchor investors Builders Vision and WRAP. Archipelago itself steps out of the room, allowing LPs to ask questions and coordinate due diligence amongst themselves.
The model is intended to address a common challenge facing first-time managers: potential backers often express interest but hesitate to undertake lengthy diligence processes on their own.
“One of the things that inhibits allocators from making commitments to funds like us is a lack of transparency around timelines,” says Mortimer.
Mortimer hopes the collective diligence process will do more than help Archipelago close its round.
“If other funds can take something from this in terms of how they approach transparency and fundraising, that would be a really great impact for us to have generated too.”
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