Innovative Houston plastics company scores $100M 'Green Loan' and prepares to scale

seeing green

Houston-based Circulus, which just received a $100 million credit facility, focuses on innovative plastics recycling. Photo via circulus.com

Fueled by a new $100 million credit facility, a Houston-based company that specializes in plastics recycling is establishing a nationwide network of recycling plants.

Circulus Holdings secured the $100 million credit facility from Riverstone Credit Partners, which has an office in Houston. This "green" loan is aimed at supporting environmental sustainability.

David Hudson, founder and CEO of Circulus, says in a news release that the credit facility "enables Circulus to rapidly develop a broad network of facilities and further the company's commitment to sustainable manufacturing. We look forward to supporting green-based jobs and preserving our environment for future generations."

Circulus, a portfolio company of Houston-based private equity firm Ara Partners, recently opened its first plastics recycling facility. The 110,000-square-foot plant is in Riverbank, California, near Modesto. It employs 45 people. So far, other Circulus plants, each of which will be larger than the California facility, are planned for Alabama, Oklahoma, the Midwest, and the Northeast.

Circulus is building plants that will transform lower-grade plastic into post-consumer resin so that it's suitable for commercial and industrial uses.

Circulus says it is diverting plastic from landfills, incinerators, and oceans and "upcycling" it into products, including plastic bags and plastic wrap. Customers for those products include retailers, resin producers, packaging manufacturers, and makers of consumer packaged goods. The company says greenhouse gas emissions associated with production of its post-consumer resin are about 88 percent below that of virgin resin.

"Through our significant investment in infrastructure and commitment to manufacturing excellence, we are supporting green job creation and reinforcing the nation's global position in sustainable manufacturing," Hudson says in a news release.

Before Circulus, Hudson was an operating partner at Ara Partners.

Founded in 2019, Circulus employs a dozen people in Houston and plans to add workers here as its network of facilities expands. Circulus is set up as a public benefit LLC, a for-profit business that promotes a social benefit for the public.

Ara Partners invests in decarbonization-focused businesses in the manufacturing, chemicals and materials, energy, and food and agriculture sectors. Aside from Circulus, portfolio companies include Houston-based Path Environmental Technology, which provides a decarbonization-oriented industrial services platform for above-ground storage tanks, and Arlington-based Priority Power Management, an energy services provider whose priorities include carbon neutrality and smart energy.

Circulus is breaking into a plastics recycling market whose global size in 2020 was estimated at $39.9 billion, according to Imarc Group, a market research company. The firm projects the market will grow to $56.5 billion by 2026.

"The demand for plastic material has been constantly increasing across several industries like food and beverage, automotive, packaging, and healthcare. The development of these industries can be accredited to rising population, inflating disposable incomes, and continuous product innovations," Imarc Group says. "In this context, higher manufacturing cost of virgin resins has necessitated the use of recycled plastic products, thereby bolstering the growth of the global recycled plastics market."

Verified Market Research estimates the global market for post-consumer recycled plastics at nearly $15.2 billion in 2020 and forecasts it will rise to almost $22.4 billion by 2028.

"The products produced from these plastics close the loop by diverting them from landfills and enabling them to be recycled," Verified Market Research says. "The advantages of employing post-consumer plastics also assist in addressing … microplastics in the environment. Microplastics are originated from plastic waste that has been deposited into the environment."

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Houston space tech companies land $25 million from Texas commission

Out Of This World

Two Houston aerospace companies have collectively received $25 million in grants from the Texas Space Commission.

Starlab Space picked up a $15 million grant, and Intuitive Machines gained a $10 million grant, according to a Space Commission news release.

Starlab Space says the money will help it develop the Systems Integration Lab in Webster, which will feature two components — the main lab and a software verification facility. The integration lab will aid creation of Starlab’s commercial space station.

“To ensure the success of our future space missions, we are starting with state-of-the-art testing facilities that will include the closest approximation to the flight environment as possible and allow us to verify requirements and validate the design of the Starlab space station,” Starlab CEO Tim Kopra said in a news release.

Starlab’s grant comes on top of a $217.5 million award from NASA to help eventually transition activity from the soon-to-be-retired International Space Station to new commercial destinations.

Intuitive Machines is a space exploration, infrastructure and services company. Among its projects are a lunar lander designed to land on the moon and a lunar rover designed for astronauts to travel on the moon’s surface.

The grants come from the Space Commission’s Space Exploration and Aeronautics Research Fund, which recently awarded $47.7 million to Texas companies.

Other recipients were:

  • Cedar Park-based Firefly Aerospace, which received $8.2 million
  • Brownsville-based Space Exploration Technologies (SpaceX), which received $7.5 million
  • Van Horn-based Blue Origin, which received $7 million

Gwen Griffin, chair of the commission, says the grants “will support Texas companies as we grow commercial, military, and civil aerospace activity across the state.”

State lawmakers established the commission in 2023, along with the Texas Aerospace Research & Space Economy Consortium, to bolster the state’s space industry.

Houston experts: Can AI bridge the gap between tech ambitions and market realities?

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Despite successful IPOs from the likes of Ibotta, Reddit and OneStream, 2024 hasn’t provided the influx of capital-raising opportunities that many late-stage tech startups and venture capitalists (VCs) have been waiting for. Since highs last seen in 2021—when 90 tech companies went public—the IPO market has been effectively frozen, with just five tech IPOs between January and September 2024.

As a result, limited partners have not been able to replenish investments and redeploy capital. This shifting investment landscape has VCs and tech leaders feeling stuck in a holding pattern. Tech leaders are hesitant to enter the public markets because valuations are down 30 percent to 40 percent from 2021, which is also making late-stage fundraising more challenging. After all, longer IPO timelines mean fewer exit opportunities for VCs and reduced capital from institutional investors who are turning toward shorter-term investments with more liquid exit options.

Of course, there’s always an exception. And in the case of a slowed IPO market, a select slice of tech companies—AI-related companies—are far outperforming others. While not every tech startup has AI software or infrastructure as their core offering, most can benefit from using AI to revise their playbook and become more attractive to investors.

Unlocking Growth Potential with AI

While overall tech startup investment has slowed, the AI sector burns bright. This presents an opportunity for companies that strategically leverage AI, not just as a buzzword but as a tool for genuine growth and differentiation. Imagine a future where AI-powered insights unlock unprecedented efficiency, customer engagement and a paradigm shift in value creation. This isn’t just about weathering the current storm of reduced access to capital; it’s about emerging stronger, ready to lead the next wave of tech innovation.

Here's how to navigate the AI frontier and unlock its potential:

  1. Understand that data is the foundation of AI success. AI is powerful, but it’s not magic. It thrives on high-quality, interconnected data. Before diving into AI initiatives, companies must assess their data health. Is it structured in a way that AI can understand? Does it go beyond raw numbers to capture context and meaning—like customer sentiment alongside sales figures? Rethinking data infrastructure is often the crucial first step.
  1. Focus on amplifying strengths, not reinventing the wheel. The allure of AI can tempt companies into pursuing radical reinvention. However, a more effective strategy is to leverage AI to enhance existing strengths and address core customer needs. Why do customers choose your company? How can AI supercharge your value proposition? Consider Reddit’s strategic approach: They didn’t overhaul their platform before their 2024 IPO. Instead, they showcased the value of their vast online communities as fertile ground for AI development, leading to a remarkable first-day stock surge of 48 percent.

  2. Use AI as a customer-centric force multiplier. Companies with a deep understanding of their customer base are primed for AI success. By integrating AI into the very core of their product or service—the reason customers choose them—they can create a decisive competitive advantage based on delivering tangible customer value.

From Incremental Gains to Transformative Growth

This practical, customer-centric approach has the potential to help companies generate immediate growth while laying the foundation for future reinvention. By leveraging AI to optimize operations, deepen customer relationships, and redefine industry paradigms, late-state tech startups can not only survive but thrive in a dynamic market. The future belongs to those who embrace AI not as a destination but as a continuous journey of innovation and growth.

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Hong Ogle is the president of Bank of America Houston. Rodrigo Ortiz Gomez is a market executive in Bank of America’s Transformative Technology Banking Group as well as the national software banking lead for the Global Commercial Bank.

Houston joint venture secures $5.2M for AI-powered methane tracking tech

Fresh Funds

Houston-based Envana Software Solutions has received more than $5.2 million in federal and non-federal funding to support the development of technology for the oil and gas sector to monitor and reduce methane emissions.

Thanks to the work backed by the new funding, Envana says its suite of emissions management software will become the industry's first technology to allow an oil and gas company to obtain a full inventory of greenhouse gases.

The funding comes from a more than $4.2 million grant from the U.S. Department of Energy (DOE) and more than $1 million in non-federal funding.

“Methane is many times more potent than carbon dioxide and is responsible for approximately one-third of the warming from greenhouse gases occurring today,” Brad Crabtree, assistant secretary at DOE, said in 2024.

With the funding, Envana will expand artificial intelligence (AI) and physics-based models to help detect and track methane emissions at oil and gas facilities.

“We’re excited to strengthen our position as a leader in emissions and carbon management by integrating critical scientific and operational capabilities. These advancements will empower operators to achieve their methane mitigation targets, fulfill their sustainability objectives, and uphold their ESG commitments with greater efficiency and impact,” says Nagaraj Srinivasan, co-lead director of Envana.

In conjunction with this newly funded project, Envana will team up with universities and industry associations in Texas to:

  • Advance work on the mitigation of methane emissions
  • Set up internship programs
  • Boost workforce development
  • Promote environmental causes

Envana, a software-as-a-service (SaaS) startup, provides emissions management technology to forecast, track, measure and report industrial data for greenhouse gas emissions.

Founded in 2023, Envana is a joint venture between Houston-based Halliburton, a provider of products and services for the energy industry, and New York City-based Siguler Guff, a private equity firm. Siguler Gulf maintains an office in Houston.

“Envana provides breakthrough SaaS emissions management solutions and is the latest example of how innovation adds to sustainability in the oil and gas industry,” Rami Yassine, a senior vice president at Halliburton, said when the joint venture was announced.

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This story originally appeared on our sister site, EnergyCapitalHTX.com

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