Why We Invested in Banyan Infrastructure

Energize leads $25M Series B

Honour Masters
March 7, 2023

Energize is proud to lead the $25 million Series B investment in Banyan Infrastructure, the software engine powering sustainable finance. Energize is joined by new investors SE Ventures and Elemental Excelerator and existing investors VoLo Earth and Ulu Ventures. Energize partner Juan Muldoon joins Banyan’s board as a director and senior associate Honour Masters joins as a board observer.

Financing barriers are slowing the pace of the energy transition  

As the race to transition away from fossil fuels and mitigate the effects of climate change accelerates, project financing inefficiencies stand in the way of large-scale climate action. For example, soft costs like accounting and compliance make up roughly one-third of the total price tag for solar projects. Even as trillions of dollars flow into the space, bottlenecks stemming from complicated underwriting, financial reporting and contract management workflows are slowing the pace of crucial sustainable infrastructure deployment.

Project financing workflows for sustainable infrastructure projects, such as solar farms and energy efficiency upgrades, are notoriously inefficient for a few reasons. For one, every renewable energy project is unique from those that came before it. The nuanced clauses, calculations and financing partners that define each project make workflows difficult to automate and scale. For energy efficiency projects, for example, the baseline calculations for determining savings – and, therefore, asset value and cash flows – are much more complex and high volume than those required for traditional energy projects. The physical differences between renewable and traditional energy projects also pose challenges. Unlike centralized power plants, renewable energy projects tend to be smaller and more distributed across the energy grid, requiring different underwriting principles as well as more monitoring and maintenance. Distributed assets don’t bode as well for financing at scale, a challenge that has prevented some sustainability-focused projects from garnering financial backing from banks and financiers.

To date, project finance workflows for sustainable infrastructure projects have also been low tech, making them both inefficient and prone to errors. Frequently, data is manually downloaded from O&M software, converted to PDF, and shared back and forth between counterparties via Microsoft Excel spreadsheets, rather than tracked via secure and automated applications.

As a result, certain sustainable infrastructure projects have been deemed high risk and not economically sound by many banks and other financial backers. Streamlining inefficient processes and digitizing manual workflows can yield significant impact, especially as the scale of renewable projects continues to grow.

A purpose-built software platform increasing the impact of each dollar spent on sustainability

Enter Banyan Infrastructure, a sustainable financing software platform that simplifies, optimizes and accelerates the financing of projects across the full lifecycle. Banyan’s unified risk and data management platform enables banks, lenders and asset managers to automate and audit complex project finance transactions, allowing them to reduce soft costs, increase deal throughput and grow their sustainable infrastructure portfolio. By streamlining mission-critical workflows, Banyan represents a generational shift in terms of how dollars can flow into the energy transition.

One way to conceptualize Banyan is to think of it as the Carta of renewables. In the same way Carta’s software unlocks capital for private markets and simplifies the nuanced calculations and reporting of capital table management, Banyan’s software provides an easy entry point for financiers to manage the legal and economic backend of sustainable finance. Similar to how startups and VCs started managing their capital tables through Carta, Banyan’s platform encourages all stakeholders involved in a transaction to use their software, no matter where they sit on the capital stack. By granting outside access to their platform’s speed and efficiency, Banyan helps create a flywheel of user adoption.  

Banyan’s software will also be integral for accessing the $369 billion in sustainability incentives designated by the Inflation Reduction Act (IRA) by helping parse through the IRA’s complexities around tax equity and transferability. While they have initially focused on solar, Banyan’s software is technology-agnostic. Their platform has the modularity and flexibility to track and monitor diverse project types, from electrification to energy storage, easily and at scale.

Banyan has secured partnerships with leading customers in infrastructure lending, investing and development on their way to 700 percent year-over-year ARR growth since 2022. Their current customers include SMBC, New York Green Bank and Standard Solar. In speaking with Banyan's customers, we learned that Banyan's software can enable one financial institution to reduce their time to market on deals by about 30 percent within the first few months of deployment, with room for further reduction. As more funds step up to finance the energy transition, the demand for project finance software will only grow.

The platform sitting at the top of the “climate tech universe”

Energize’s team has long been passionate about the role fintech can play in enabling the sustainability transition, and Banyan marks our first true fintech investment since initiating research in the space two and a half years ago. In our opinion, Banyan’s platform stood out from other fintech solutions for a few key reasons:

- Banyan’s software is purpose-built for sustainable infrastructure, making it better able to address the intricacies and specificities of the space than other generalist financing software on the market. We believe this sustainability focus, combined with their customer stickiness, gives Banyan a competitive advantage over other project finance solutions.

- We’re also excited about the role Banyan’s software will play in enabling all our other climate software investment themes, from renewable energy to mobility to decarbonization. By optimizing sustainable project finance, Banyan’s platform effectively sits at the top of the “climate tech universe.”

During our pre-investment diligence, we worked closely with several of our partners financing the energy transition who helped us validate the pain points that Banyan addresses from the trenches. Several of those financing partners have already engaged with Banyan to accelerate their workflows. Moving forward, we’ll continue to foster collaboration with Banyan and our corporate network to support widespread investments in sustainability.

A growing team ready to accelerate the energy transition  

Banyan is led by co-founders and industry veterans Will Greene (CEO) and Amanda Li (COO), whose combined experience marries go-to-market expertise with technical prowess. Will formerly honed his technical chops through engineering roles at Oracle and Twilio, while Amanda was an early employee at Generate Capital, where she saw first-hand the inefficiencies slowing down clean energy project implementation.

This latest infusion of capital will enable the Banyan Infrastructure team to hire top talent for their San Francisco-based startup (view open positions here). We’re thrilled to work with Will, Amanda and the entire Banyan team!