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A key challenge for climate tech startups is shifting from early design and development of their technology to pilot plants, first-of-a-kind facilities and customer deployments. Venture capital is readily available to fund those early stages. But commercialization requires a different set of investors to provide more suitable debt financing.
London-based Tangible is building a financial services platform to help climate tech companies make that leap. The platform will connect climate tech companies with lenders and operators, structure debt deals and manage the operations of raising debt. To support the launch, Tangible has raised £4 million ($5 million) in equity and grant funding from a group of European and UK-based venture firms, including Future Positive Capital, Systemiq Ltd., Hardware Club VC, MMC, and Blackwood.
“The climate tech exists – what’s missing is the financial infrastructure to scale it,” Tangible said in announcing the deal and a related rebrand. It aims to “unlock the trillion-pound debt markets needed to scale climate solutions at the pace our planet needs.”
Tangible launched in 2021 as Twist, a data and reporting management platform for borrowers; it has rebranded with the fundraise. The company is among the investors modeling solutions to tackle climate finance’s “missing middle.” Such funding typically doesn’t meet the risk and return parameters of venture capital, but is too novel and risky for infrastructure finance and too capital-intensive for growth stage private equity.
In June, for example, Elemental Impact debuted its “D-SAFE,” a twist on Silicon Valley’s “simple agreement for equity,” a debt instrument that can convert to equity.
“Hard assets are critical to net zero, our role is to grow the balance sheet dedicated to supporting them,” said William Godfrey, the company’s founder and CEO.
