Concentro, a start-up platform that connects distributed generation clean energy projects and tax credit buyers, has over USD 300m of tax credits that are ready to be financed on the platform across more than 60 developers, co-founder Tao Mantaras told NPM in an interview.

Mantaras and his co-founder Iñigo Rengifo created Concentro in February 2023. Since its launch, the start-up platform has enabled more than USD 10m in transactions financially closed, with several more transactions expected to close by the end of 2024.

“Today, there are billions of dollars sitting on the sidelines because many developers cannot access cost-effective financing,” said Mantaras. “Lack of scale, high transaction costs as well as complexity to transact means that many developers find it hard to finance their projects, leaving a massive gap in the market for financing these projects,” he added.

The platform caters to projects with capex costs ranging between USD 1m and up to USD 50m. Rengifo and Mantaras, with their platform, are helping DG developers monetize their tax credits through transferability. While they mostly work with solar projects, they are agnostic on technology, also servicing wind, EV, manufacturing (45X), fuel cells, RNG, and BESS projects, among others.

So far, the platform has closed several sub-USD 250,000 tax credit transfers, including the market’s smallest transaction closed to date of USD 100,000.

“The Inflation Reduction Act was supposed to provide all developers and their projects, large and small, with a more streamlined way to monetize their tax credits. But we feel more needs to be done to enable transferability for the middle-market,” Mantaras mentioned. “We’ve been busy closing transactions this year and our pipeline continues to grow, so we feel we’ve hit a clear need in the market,” he noticed.

To Mantaras and Rengifo, the platform differentiates itself from other competitors in that it is not only a pure-play marketplace to sell and buy clean energy tax credits, but instead it manages the entire end-to-end process, including running due diligence processes, providing full-wrap insurance, as well as bundling across projects to get economies of scale.

To make projects and portfolios more attractive to buyers when they lack scale, Concentro bundles them even across developers so that they have a meaningful size for these buyers. Bundling also helps to get better terms from insurance providers.

“Concentro is leveraging technology to streamline the transaction and diligence process so that middle-market developers can finally access the financing they need to bring their projects to life,” Mantaras said.

Rengifo and Mantaras closed a pre-seed fundraising in 2023, as proof of concept. Later around February 2024, the first transactions reached financial close enabled by the Concentro platform.

During the summer 2024, Concentro closed a USD 3m fundraising with venture capital funds that was oversubscribed. Firstminute Capital was the largest investor, with significant participation of LifeX Ventures, Silence VC, Avesta Fund and Plug and Play, along with other angel investors. Mantaras and Rengifo maintain control of the company as majority shareholders.

“That is where we are standing today, but we have the vision to become a fully-integrated financing engine for the clean energy middle market segment,” Mantaras pointed out.

The founders are developing their own proprietary, built in-house, AI-assisted technology that expedites, optimizes, and brings more efficiency to the analysis associated with the underwriting and due diligence process required to help DG developers finance their projects.

“We believe that the passing of the IRA with all the incentives for clean energy development, were meant to support small companies and small project development too, but so far only the biggest players have been able to take advantage and find ways to monetize their tax credits, for example through tax equity,” Mantaras said.

“We want to change that situation, offering support and access to financing to mid-cap developers that are not currently well serviced,” he added.

*This story was originally published exclusively for NPM subscribers.

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