Small businesses struggle to claim IRA tax credits. This startup aims to help.

Tax credits from the Inflation Reduction Act have upended the cleantech landscape. Over $110 billion has already flowed to new clean energy manufacturing plants, and the many federal rebates and tax credits have encouraged investment by individuals and businesses alike. 

Still, actually collecting the cash is harder than it sounds, especially for those unfamiliar with navigating the United States’ intricate tax landscape. And that’s where a middleman comes in.

• The top line: The startup Giraffe Financial, which launched this week backed by parent companies Momentum and Skyview Ventures, rolled out what it describes as the nation’s first program designed to make it easier for underserved small- and medium-sized businesses and non-profit organizations to find, claim, and monetize IRA tax credits — even without in-house tax expertise. 
• The current take: According to Andy Karetsky, president of Skyview Ventures, “the vast majority of IRA tax credit beneficiaries to date have been private sector companies,” and determining how to claim the credits can be difficult for small companies or public entities. “It’s not because [public-sector companies] are ineligible; it’s because they’re not getting the support they need, and billions of dollars in value are being left on the table,” he added in a statement.

Spun out of the Momentum X climate finance venture studio, the startup recently closed a $1.5 million pre-seed venture funding round that enabled the launch of its platform. Angel investors representing electric vehicle manufacturing and charging, artificial intelligence, carbon, and environmental commodity organizations also participated in the round. 

It's a tiny, early-stage company, but its sheer existence points to how much the landscape of tax credits has shifted — and how much guidance small companies and organizations could use.

Giraffe’s AI-powered service analyzes and evaluates customer-provided investment data to match users with tax credits they may be eligible for and comply with all necessary rules. 

Users will also have the ability to monetize their tax credits. Giraffe’s platform helps tax-exempt organizations navigate the IRS’ new direct pay rules to secure cash tax refunds. Specifically, the company focuses on organizations pursuing investments in electric vehicles or EV charging, renewable energy, and energy storage projects.

For instance, Giraffe’s service helped the Butte Valley Unified School District eliminate all out-of-pocket costs for new electric school buses and charging infrastructure. 

The platform is also designed to help small businesses offset their tax liability or transfer their credits to other organizations for cash. Current customers include power solutions provider Cummins, electric school bus company Bird Bus, and XCharge, an EV charging technology platform. 

Giraffe describes its service as the first tax credit-assistance program directed at small businesses and non-profit organizations like schools or local governments.