Climate tax credits are just getting started.
In 2022, the market for transferable climate tax credits didn’t exist. Now, just over a year later, $8 billion of these credits have traded hands. Look into the eye of that 10-figure storm and you’ll find Crux, our one-stop-shop for clean energy financing.
These tax credits? They are, literally, a big fucking deal. Let’s say a company does something the government wants to encourage, like installing solar panels. As a thank you, the feds give that company a tax credit which is like a coupon, but for taxes. But usually those scrappy solar outfits don’t have big tax bills themselves. For them it’s like wasting a $100 coupon for a $10 charge. Bummer.
Yet, there are some very profitable companies in the world that have big tax bills every year. They could really use that coupon, and so much so that they are willing to pay a lot for it.
To use the example above then, the big company might pay the solar startup $95 for their $100 tax credit coupon. That $95 goes directly to the startup and funds their operations, particularly in the early days when their venture isn’t profitable. For this, the big company saves on their taxes, plus they and their shareholders and employees know they are a direct part of the solution to this climate mess.
The best part? Because of all this, the planet gets more and more climate companies taking the plunge and innovating our way out of the shitshow. (We are still debating whether this is a win + win + win or a win * win * win and thus a win3 all because we are those kind of geeks.)
Which brings us back to Crux. Those buyers and sellers needed a place to find each other, so Crux created the digital platform to connect the next trillion dollars of these transferable clean energy credits. Yeah, that’s trillion with a big ol’ T.
In just their first six months in business, Crux built up a pipeline of $8.3b in credits listed for sale while amassing a couple billion in buyer demand. That got people’s attention, but it’s just the start. Transferable tax credits could ramp up to $100b annually, which means 11-zeroes of corporate cash a year going straight into climate, energy, and infrastructure. Crux is, well, at the crux of it all.
Now, what was already one of our fastest growing companies has a fresh $18 million Series A to go even bigger. With their new cash — which triples their total funding — Crux will be staffing up, expanding their offerings, and cranking the dial on the climate transition.
Does unfucking the planet by getting a discount on your taxes sound like April 15th music to your ears? Get smart here.
Meantime, does this seem like the kind of place you’d like to work? Crux is hiring readers of this site (well, and other awesome people too).
The post Zero to $8 Billion in a Year? I’m Listening. appeared first on Lowercarbon Capital.
