Friday Fundings: Sustainable Textile Company Recover Snags $100 Million

Decades of Recycling

Recover, a materials-science company, can trace its founding back to 1914. At that time it was a textile factory in a small town in southeastern Spain. The company’s CEO, Alfredo Ferre, notes the use of sustainable materials goes back nearly as far. For 75 years it has focused on recycling and reducing waste.

Now, Recover recycles cotton used by online retailer Revolve’s Lovers and Friends. The Friends denim brand also uses its cotton. In a fundraising round led by Goldman Sachs (GS) asset-management arm, Recover snagged a $100 million growth investment. It values the company at nearly $1.1 billion.

A Sustainable Brand

Industry observers say the fashion and apparel business is highly unsustainable most of the time. This is a result of the large amount of water used in traditional textile manufacturing. But consumers are starting to demand sustainable clothing and regulation, pushing the industry in that direction. Years ago Recover never advertised that it used “recycled” cotton, but that’s now part of its branding strategy.

Part of the company’s plan is to take that brand awareness further. Executives want to see Recover stand for transparency and authenticity in its use of sustainable materials.

A Growing Industry

Recover’s business model involves taking textile waste and turning it into cotton fibers and blends. Its operations are located in close proximity to where textiles and its waste are produced. This cuts down on its greenhouse-gas emissions and transportation costs.

Data analysis firm, Research and Markets, predicts the so-called ethical fashion market will grow around 9.7% annually through 2025 when it will hit $10 billion. Recover’s long-term aim is to scale up its output and become a global solution for retailers, rather than see old clothes burned or thrown into landfills.

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