Cleantech startup gearing up to expand rare earth recycling infrastructure in the US and Europe.
Toronto-based Cyclic Materials is looking to expand its rare earth recycling infrastructure in the United States and Europe following a $71-million CAD ($53-million USD) round of Series B financing.
The all-equity, all-primary funding round was led by Toronto-based cleantech investor ArcTern Ventures. New investors included BDC Capital’s Climate Tech Fund, Hitachi Ventures, Zero Infinity Partners, Climate Investment, and Microsoft through its Climate Innovation Fund. They joined existing investors Fifth Wall, BMW i Ventures, Energy Impact Partners, and Planetary Technologies.
A spokesperson for Cyclic Materials confirmed to BetaKit that all funding for the round has closed, but declined to disclose when the funding closed. The Series B round brings Cyclic Materials’ total funding to $111 million CAD.
“Not only is our technology essential for supporting sustainable domestic production of rare earths, but it will also play a critical role in re-establishing North American and European leadership in the rare earths industry.”
“We’re energized to partner with the world’s top sustainability-focused infrastructure and corporate investors to scale our technology’s impact,” Ahmad Ghahreman, CEO and co-founder of Cyclic Materials, said in a statement.
Founded in 2021, Cyclic Materials has developed a supply chain aimed at sustainably recovering rare earth elements from electric vehicle motors, wind turbines, MRI machines, and electronic waste from data centres.
Rare earth elements comprise 17 chemically similar metals that include neodymium, dysprosium, and cerium.
These are called rare because they are not often found in concentrated and economically exploitable deposits, making their extraction and processing difficult. These elements are used in a wide range of modern technologies, including smartphones, computers, wind turbines, and electric vehicle motors.
In the statement, the startup said rare earth elements are currently not recycled at a commercial scale and end up in landfills. The company’s goal is to create a circular supply chain by taking landfill-bound products and recovering their critical metals through its magnet recycling processes.
Cyclic Materials’ spokesperson said these processes include a two-stage approach to recovering rare earth elements from end-of-life products. The first stage, which uses its MagCycle technology, mechanically extracts magnets from magnet-bearing materials like electronic motors, while separating other metals such as copper, aluminum, and steel. The second stage, which uses the startup’s REEPure technology, employs a chemical process to produce a Mixed Rare Earth Oxide, which is a key input for magnet production.
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“Not only is our technology essential for supporting sustainable domestic production of rare earths, but it will also play a critical role in re-establishing North American and European leadership in the rare earths industry,” Ghahreman added.
Another opportunity Cyclic Materials is working on is its product, CC360, which is targeted at data centres. Typically, hard drives are sent to IT asset disposal (ITAD) companies for data destruction and shredding to recover metals like gold and silver, but rare earths are not recovered in this process, the startup said in the news release.
CC360 enables ITAD companies to separate certain hard drives specifically for rare earth recovery, while the remaining drives go through the usual recycling process. These extracted magnets are then processed using Cyclic Materials’ methods.
“This alignment with our impact-driven investment strategy is why we chose them to become a part of ArcTern’s investment portfolio.”
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Cyclic Materials has been trialling CC360 with companies like Sims Lifecycle Services. In August, the startup signed a partnership with United Kingdom-based Synetiq for the recycling of electric motors containing rare earth elements. That agreement marks the startup’s first deal to source raw materials from an international supplier.
Microsoft’s investment, which comes from its Climate Innovation Fund, was first announced in July. While that announcement did not disclose whether Microsoft was a customer of Cyclic Materials, Ghahreman did note the startup’s tech will “prove invaluable to large data centre operators such as Microsoft as they work towards their circularity and sustainability goals.”
The Series B funding also closely follows Cyclic Materials receiving a $4.9-million CAD grant from Natural Resources Canada that supports the continued operation of Cyclic Materials’ commercial demonstration facility for producing high-purity rare earth elements from recycled magnet material. Earlier this year, Cyclic Materials was one of 13 Canadian companies named to the 2024 Global Cleantech 100 list.
“Cyclic Materials’ mission-driven approach to the circular economy combined with its proprietary rare earth metals recycling processes offers a scalable decarbonization solution that contributes to the abatement of greenhouse gas emissions,” Marc Faucher, managing partner at ArcTern Ventures, said in a statement.
The new funding will be used to accelerate the startup’s international growth. Cyclic Materials plans to use this capital to build rare earth recycling infrastructure in the US and Europe, and to grow its team.
Feature image courtesy of Cyclic Materials.