Climate tech startup Crux just raised $4.25M

Just a few months after launching, Crux, a DC-based startup, just nabbed new funding for its climate tech.

Crux was founded by Alfred Johnson and Allen Kramer, who previously founded and sold the software company Mobilize. The company officially launched in April and just raised $4.25 million in a round led by Ardent Venture Partners. Existing investors Lowercarbon Capital, New System Ventures, Overture and QED joined new investors Ørsted, LS Power, Canapi, Hartree Partners and Commonwealth Ventures to participate in the round.

Crux, currently a 16-person company, developed a platform for transferable tax credits from clean energy projects. Johnson, an alum of BlackRock, the Treasury Department and other government work, said that the company was created in response to the Inflation Reduction Act (IRA). With that legislation, it became legal for companies to transfer tax credits in exchange for cash.

“This is such an unusual circumstance because it’s not often that the dynamics of a market get entirely changed and a new trillion-dollar market emerges as this has,” Johnson told Technical.ly.

With Crux, clean energy developers, tax credit buyers and financial institutions can all work together to manage and exchange the credits. With the IRA, tons of tax credits are available to companies building clean energy facilities or producing clean power and materials. Selling excess tax credits, Johnson said, can fund new clean energy projects.

Johnson added that energy development companies receive credits for building clean power facilities and materials, but often can’t use them. Crux lets these companies sell the credits to a third party that wants to invest in sustainability. The platform includes software for workflow, data and stakeholder management to facilitate a marketplace for larger buyers.

Johnson said that the company received interest after raising an initial round and officially launching in April.

“We saw just a ton of interest from the market subsequent to it, we had a lot of people writing into our website saying: ‘We have credits to sell, we need to figure out how to do that,'” Johnson said.

With the funds, Johnson plans to grow the team to 16 people in the coming months, and potentially to 24 beyond that. He also said the company will build up the bilateral transaction platform into one that also accommodates the role of the syndicator.

With technology like Crux’s, he hopes that the startup can be part of building the market around tax credit transfers.

“If we make a huge difference in this market, then more money flows into renewables at better prices. That allows more developers to build more things that facilitate the energy transition, and we urgently need that,” Johnson said.