The climate-focused alternative finance startup Enduring Planet* is launching a new funding source for climate startups getting government grants.
With the Inflation Reduction Act, the CHIPS Act, last year's Bipartisan Infrastructure Law, alongside funding commitments from California, New York, and other states, there's a pool of multiple billions of dollars in grant funding available to technology companies and businesses developing and deploying solutions to the climate crisis.
Enduring Planet, a fully remote fintech startup focused on providing cash to new climate tech businesses, already has a revenue-based financing business in place.
Under that model, Enduring Planet provides growth financing to early-revenue climate startups and small businesses in exchange for a percentage of future revenue, typically over 12-24 months.
Now, the company is adding upfront cash for government grant recipients to its product mix.
The goal is to help bridge the time between the notice of an award and the distribution of funding, according to Enduring Planet co-founders Dimitry Gershenson and Erin Davis.
“The Climate Grant Advance product is yet another solution from Enduring Planet to fill in the gaps of the capital ecosystem for climate companies," said Davis, Enduring Planet's co-founder and chief operating officer.
Companies often have to wait months between when a grant is awarded and when the money actual lands in their account, according to Gershenson.
After issuing a staff recomendation of award, states and federal agencies generally have long contracting and budget negotiation timelines, as well as complex internal approval processes which generally take 3-6 months, and then there could be another three month waiting period before a company can get reimbursed for their first invoice.
“We believe the Climate Grant Advance product can bridge a fundamental ecosystem funding gap for climate companies," Gershenson, the company's chief executive, said in an email. "With climate change, time is of the essence – by taking advantage of this innovative product, awardees can get started right away.”
The Enduring Planet team also prioritizes diversity and inclusion in its investment process. The majority of the investments that the company has made have gone to under-represented founders and diverse teams or companies serving marginalized communities, according to Gershenson.
The kinds of early financing that Enduring Planet can provide to founders can be transformative and, importantly, non-dilutive.
The company advances cash based on the size of the grant funding up to roughly half a million dollars, Gershenson said. And Enduring Planet only advances cash against the reimbursable portion of the grant.
Through its traditional revenue-based financing business, Enduring planet has already signed six deals and has signed term sheets for the next five.
Companies that have received financing through the Enduring Planet program include Los Angeles-based Kigt, a developer of new charging hardware and software that integrates with light poles. The company received a grant to build a demonstration charging hub for high mileage rideshare drivers in Los Angeles County. Through Enduring Planet, the company was able to procure equipment and jumpstart project development by six months, Gershenson said. “Our goal is to offer credit products for every life stage of a company," said Davis, in an emailed statement. "Our new Climate Grant Advance product enables us to impact very early stage companies that are working on innovative solutions to reduce emissions, remove carbon, and improve the resilience of vulnerable populations.” *FootPrint Coalition's venture partner and editor, Jon Shieber, is an advisor to Enduring Planet.