A team of long-time renewable energy and finance industry executives announced the launch of Generate Capital, a specialty finance company focused on funding small-scale, resource-efficient infrastructure.
Generate Capital's co-founders include President Jigar Shah, the founding CEO of SunEdison and the Carbon War Room; Chief Executive Officer Scott Jacobs, a co-founder of McKinsey & Company's global CleanTech practice and co-founder of resource-focused investment firm EFW Partners; and Chief Investment Officer Matan Friedman, a former venture capitalist and the co-founder and Managing Partner of Resource Efficiency Finance. Generate Capital's Chairman of the Board is Jason Fish, a specialty finance veteran who co-founded both Capital Source and Alliance Partners.
Generate Capital offers multiple types of financial services products, including short-term asset-based financing, equipment leasing and small-scale project finance. Typical projects will be between $2M and $20M in size, primarily in areas like commercial scale renewable energy generation, heating equipment retrofits, energy storage projects, urban farms and wastewater treatment technologies.
Generate Capital believes it has assembled one of the largest pools of capital available for these types of projects and already is underwriting projects in the renewable energy, energy storage and energy efficiency sectors. The company has identified more than $500M of opportunities meeting its underwriting criteria and anticipates announcing the first projects in Q1 2015.
"Sustainability is about doing more with less, whether energy, water, food, or any other critical resource," states Jacobs. "Resource productivity is a matter of building the infrastructure and deploying existing solutions, not inventing new technology. Generate Capital was launched to partner with the large and growing developer community supporting this Resource Revolution."
Having financed over $1 billion in sustainable infrastructure- and technology-related transactions in the last decade, the founders have seen first-hand that a new type of capital partner is needed for this market.
"Many innovative companies have technologies that deliver compelling value to their customers, but they lack a financial partner to help them achieve their sales goals -- few sources of that capital exist today for energy and resource-related project opportunities under $20 million in size," states Shah. "Companies and project developers recognize that most customers simply don't want to pay cash up-front for technology that saves them money over time."
This Infrastructure-as-a-Service model allows companies to benefit from resource productivity solutions without having to allocate the capital expenses to acquire the new technology and infrastructure.
"From my own experience, I have seen how challenging it is for banks to underwrite smaller projects efficiently, and new, often non-bank lenders have entered the marketplace to fill that void," states Fish. "Generate Capital will apply well-proven financial products to the smaller scale renewable energy and energy efficiency assets which have lacked this capital historically, and this team is capable of doing it profitably and at scale."
Generate Capital's investors include Ceniarth, a mission-driven family office whose Director, Greg Neichin, previously served as head of the Cleantech Group's consulting business.
"We believe that the biggest impacts in sustainability will be found in scaling the adoption of existing technology. While significant capital has flowed to inventing new venture-backed technologies, we believe that the best risk-adjusted returns are available in financing the deployment of proven products and services. Generate Capital is a purpose-built firm filling a critical gap in the financing landscape that we believe is poised to be a leading capital partner to the sustainable infrastructure world," states Neichin.
Generate Capital is a specialty finance company based in San Francisco, California, founded by several leading entrepreneurs and financiers in the renewable energy, technology, finance and sustainability sectors. It partners with project developers and technology manufacturers globally to finance the Resource Revolution -- doing more with less of our critical resources like energy, water, food and materials.