Introduction
In a bid to address the pressing issue of climate change, Enduring Planet, a novel fintech company focused exclusively on funding climate entrepreneurs, has unveiled its inaugural product. Following the successful securing of $5 million in debt and equity financing, this pioneering firm is poised to disrupt the traditional venture capital landscape by providing fast and efficient access to debt capital for startups and small businesses committed to mitigating emissions or helping humanity adapt to the devastating effects of burning fossil fuels.
A Commitment to Climate Finance
Co-founder and CEO Dimitry Gershenson emphasized the urgency of addressing climate change, stating, "When the world’s on fire, it’s pretty important that we move quickly and not take six months to underwrite a deal." Enduring Planet is dedicated to delivering checks up to $500,000 in under 30 days to companies that meet specific criteria. By doing so, they aim to bridge the gap between innovation and implementation, enabling climate-focused startups to scale their impact more rapidly.
Revenue-Based Financing: A Game-Changer
Out of the gate, Enduring Planet offers revenue-based financing (RBF) to companies generating over $25,000 per month. In exchange for this capital, businesses must surrender a portion of their monthly revenue – up to 7% – in addition to as much as 3% more off the top, and a 1% origination fee, until the loan is repaid. This model differs significantly from traditional venture capital, which often involves dilutive equity stakes and control by investors with conflicting interests.
Two Early Success Stories
So far, Enduring Planet has successfully funded two startups:
- New Sun Road: A software developer for renewable microgrids.
- Aquaoso: A climate risk data company.
These early successes demonstrate the potential of Enduring Planet’s innovative approach to climate finance.
Alternatives to Dilutive Venture Dollars
While revenue-based financing options have proliferated in recent years, including offerings from Stripe and Uncapped, Enduring Planet’s model stands out. By leveraging sales data to predict future revenue, they provide an attractive alternative or supplement to traditional venture capital. This approach allows entrepreneurs to retain control of their businesses while accessing the necessary funding to drive growth.
A Sustainable Model
Enduring Planet’s requirements for businesses include sizable gross margins (north of 35%) to ensure they can weather monthly payments. However, this model is incompatible with startups boasting razor-thin margins, such as emerging electric vehicle firms. To address this limitation, Gershenson revealed that the company is already piloting a second instrument allowing it to offer non-dilutive capital to entrepreneurs who don’t qualify for revenue-based financing.
The $5 Million Raise
Enduring Planet’s funding round includes approximately $2.4 million in pre-seed equity and $2.6 million in debt, which will fund its first loans ahead of future raises. The company’s backers include:
- Climate Capital
- Common Sense Fund
- KD Venture Partners
- Keiki Capital
- Portland Seed Fund
- Susquehanna Foundation
Conclusion
Enduring Planet’s pioneering approach to climate finance has the potential to transform the way startups and small businesses access capital. By providing fast debt capital, this fintech firm is empowering entrepreneurs to focus on their mission while navigating the challenges of climate change.
Related Topics:
- Climate Change
- Fintech
- Revenue-Based Financing
- Startups
About the Author:
Harri Weber is a senior reporter at TechCrunch, covering climate and related topics. Her work has also appeared in Gizmodo, Fast Company, VentureBeat, dot.LA, Input, and The Next Web.
Contact Information:
harri@harri.fm
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