Tangible, a climate hardware fintech firm, has recently secured substantial funding of £4.0 million, marking a significant step in refining the financial infrastructure for climate solutions. Tangible is leveraging its innovative platform to transform climate hardware into assets that institutional investors find comprehendible and worth funding. The company’s mission is to address the gap between climate technology innovations and the asset-backed securities market, enabling a smoother transition towards sustainable financing.
In recent years, the climate finance sector has faced persistent challenges bridging the divide between emerging climate technologies and the financial markets. While venture capital has supported the initial development phases, deploying technologies at scale requires access to debt markets. Tangible’s approach aims to provide a structured pathway for scaling these technologies by making them financially viable for larger-scale investment. This pursuit aligns with previous efforts to standardize the financing of climate assets, but Tangible’s focus on asset-backed financing structures offers a fresh perspective on the issue.
How Does Tangible’s Platform Work?
Tangible’s platform plays a pivotal role by offering a sandbox environment, allowing emerging innovations to simulate transactions and explore pathways to bankability. This feature is particularly beneficial for first-of-a-kind technologies that often have limited data available. For technologies ready to scale, Tangible provides standardized tools to expedite the deployment process, ensuring it is both cost-effective and efficient. Additionally, the platform’s playbooks automate crucial parts of deal closure, freeing up valuable time for deal teams.
Why Is Debt Market Access Crucial?
Debt market access is essential for scaling climate technologies, according to William Godfrey, Tangible’s founder and CEO. He articulates that while venture capital supports innovation, accessing debt markets allows for the deployment of technologies on a larger scale. Founders, traditionally focused on equity, must adapt to a debt-driven mindset that emphasizes structural risk management and credit risk compensation. This dual mastery of equity and debt is key to the success of climate companies.
Prominent investors such as Future Positive Capital, Hardware Club VC, MMC, Blackwood, and Systemiq participated in the funding round. Additionally, Tangible is collaborating with 28 leading investment banks on an initiative to standardize the financing approach for emerging climate assets. This collaborative effort underscores the importance of resilience and trust in financial systems, especially in the context of climate change.
The emphasis on bankruptcy remote structures further highlights the necessity for reliable financial infrastructure. Such structures are crucial for the rapid and trustworthy deployment of capital, as they enhance the resilience of financial systems and build trust. Godfrey stressed the lessons learned from the 2008 financial crisis, warning of the heightened stakes involved in climate finance.
The newly secured funds will be allocated to expanding Tangible’s team and further developing its platform. This development aims to ensure that capital is deployed effectively and efficiently to climate-critical projects, supporting the broader mission of mitigating the impacts of climate change through robust financial strategies.
The recent funding round for Tangible highlights the ongoing efforts to create a robust financial infrastructure for climate solutions. By focusing on asset-backed financing structures, Tangible is addressing a critical gap in the transition to sustainable finance. The company’s collaboration with major investment banks further underscores the necessity for standardized financing approaches. These initiatives are vital for ensuring that climate technologies can scale effectively, ultimately contributing to global climate action goals.
