Goldman Sachs leads a $100 million investment in Spanish sustainable fashion startup Recover; now valued at $1.1 billion

Some have called it a fashion crime. The amount of waste in the fashion industry is unfathomable until you start peeling the surface. The $2.4 trillion fashion industry — with its short trend cycles and massive production rates — was named one of the most polluting sectors in 2021.

According to the United Nations, of the 100 billion fashion items produced every year, 60% are thrown away within twelve months. The Environmental Audit Committee found that 15% of all clothing fabric is thrown out at the cutting stage before anything even ends up in stores.

In the United States alone, 70% of the 13 million tons of clothing and footwear waste generated each year ends up in a landfill, according to another report by the US Environmental Protection Agency (EPA). Now, one startup wants to change by reducing waste in the fashion industry with sustainable textiles.

Enter Recover, a Madrid, Spain-based sustainable fashion startup, and producer of low-impact, high-quality recycled cotton fiber, and cotton fiber blends. Recover’s proprietary recycled cotton fiber reduces the carbon and water intensity of the apparel supply chain, addressing the apparel sector’s contribution to one of the world’s largest sources of environmental degradation.

This week, Recover announced it has raised $100 million minority equity capital investment led by the Sustainable Investing business within Goldman Sachs Asset Management (Goldman Sachs), with participation from another majority shareholder STORY3 Capital Partners. The latest round now pushes Recover’s valuation to $1.1 billion.

Since its inception, Recover has partnered with popular fashion retailers including Primark, and Zara, and provides them with recycled fiber. Recover says it plans to produce 350,000 metric tons of recycled cotton fiber and generate $1 billion in revenue by 2026.

Recover will use the investment to accelerate its global expansion and production capacity, allowing more rapid adoption of sustainability initiatives by leading brands and retailers. Recover serves some of the largest and most recognizable retailers, brands, and vendors in the world, including, among others, Primark, Inditex, C&A, Revolve, and Lands’ End.

According to another research firm Research and Markets, the ethical fashion market, which includes firms that emphasize environmental and labor practices, is expected to grow at a 9.7% compound annual growth rate to $10 billion in 2025.

Recover’s proprietary recycled cotton fiber reduces the carbon and water intensity of the apparel supply chain, addressing the apparel sector’s contribution to one of the world’s largest sources of environmental degradation. Recover estimates that the new investment places Recover on a path to increase its production to over 350,000 metric tons of recycled cotton fiber per year by 2026, saving up to 5 trillion liters of water annually—equivalent to the drinking water consumed by over 4.5 billion people each year—and allowing for significant reductions of carbon emissions, energy and land use relative to the conventional cotton fiber, based on industry research.*

“Goldman Sachs is committed to partnering with innovative businesses that help drive sustainability,” said Letitia Webster, Managing Director and Chief Sustainability Officer of Goldman Sachs Asset Management Division. “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.” As part of the transaction, Webster will join the Board of Directors of Recover.

“Recover is helping create a sustainable future by solving a colossal environmental issue and we are overjoyed to partner with Goldman Sachs to accelerate our growth,” said Alfredo Ferre, fourth-generation family steward and CEO of Recover. Ben Malka, Operating Partner at STORY3 Capital Partners and Executive Chairman of Recover, stated, “Recover has perfected the art and science of scaled production of sustainable recycled cotton fiber over more than 70 years across multiple generations of the Ferre family in Spain. Today, Recover offers a solution grounded in proprietary IP that provides cost-competitive, maximum-performance recycled cotton fiber for both rotor and ring-spinning applications.”

The Recover brand is an important part of leading retailers’ and brands’ sustainability commitments and credentials, and a growing number of Recover’s customers are co-branding products with Recover to showcase that they have been produced with the company’s recycled cotton fiber. Operating in the $50 billion cotton market, Recover is a leading innovator and category-defining business that has experienced rapid growth. The company has opened new manufacturing hubs in Pakistan and Bangladesh, with additional hubs in Bangladesh and Vietnam due to open in the near term.

“For change to happen at scale across the fashion industry, we need partnership and collaboration with innovators like Recover,” said Lynne Walker, Director of Primark Cares, Primark. “As we increase the use of Recover’s recycled cotton fiber in Primark products, this investment will enable us to meet our pledge to make more sustainable fashion affordable to millions of customers.”