Part fintech startup, part cooperative, part global movement, Luxembourg-based climate fintech SPONSOR hopes to close the $3.5 trillion funding gap for climate solutions. And it’s doing it from Luxembourg.
The story of SPONSOR begins with tragedy but quickly grew into a global mission. From his bedroom window in Michigan, Michael could see the coal stack that defined his childhood, and, as he later learned, would end his father’s life. That realisation set him on a path that would transform his career from banking to climate finance.
“I lost my dad to lung cancer in 2009, and after digging into the causes, I realised the coal-fired facility near our home was killing about 35 people a year in a community of 35,000. My dad was one of them. I decided to do something about it” said Michael Grimm, CEO and co-founder of SPONSOR.
While at the Asian Development Bank, Grimm authored the post Asia Can Go 100% Renewable, showing that a fully renewable system was both possible and economically superior. Inspired by the work of researchers such as Stanford’s Mark Jacobson, he became convinced that this was true not only for Asia but for the world.
His attempts to work directly with national governments left him disillusioned, as greed and corruption often slowed or derailed progress. So he began to look for another way forward, sketching out a private sector solution that could bypass political bottlenecks and mobilise capital at scale. In December 2023, after a conversation with Ryan Galloway, now a member of SPONSOR’s advisory board, Grimm decided the time had come.
The following month he flew to Vietnam, began recruiting the team that would include co-founders, CTO Steven Lawson and head of business development Rahat Mohammad, and formally incorporated SPONSOR in Luxembourg in January of 2024.
A $3.5 trillion gap
The scale of the problem SPONSOR was created to address is daunting. The Intergovernmental Panel on Climate Change has warned that humanity must cut emissions almost in half by 2030. Achieving this requires around $5.5 trillion dollars in annual investment, yet only $2 trillion was deployed in 2024. “Closing a $3.5 trillion annual gap sounds daunting, but it’s less than ten cents out of every $100 changing hands in the global economy every year,” said Grimm.
The irony is that fossil fuels still receive seven trillion dollars a year in subsidies. Without those subsidies, the industry would collapse, yet the same resources are not being mobilised toward solutions that could save millions of lives.
For Grimm, the challenge was never just about money or technology. Solar, wind, and batteries are already cheap and effective. The real bottlenecks were human capacity, inefficient processes, and a fragmented market.
There are around 100,000 project financiers in the world, and each one is already working long hours. Training new experts takes years, and humanity does not have that kind of time. Deals are often negotiated from scratch, consuming anywhere from two to twenty years, with little standardisation or shared templates.
Meanwhile, the market is fragmented, gatekept, and opaque, making it difficult for projects and stakeholders to find each other. “These three root causes, limited expertise, inefficiency, and fragmentation, are why too few deals get done every year,” said Grimm.
Building a platform for scale
SPONSOR was built to break through those barriers. It is a collaborative, AI-powered fintech cooperative designed to help climate finance scale from $2 trillion annually to the $5.5 trillion the world needs. Its knowledge base of precedent deals is used to train artificial intelligence tools that can do much of the heavy lifting, allowing experts to support more projects and newcomers to learn more quickly.
SPONSOR’s work with governments digitises and scales standardised contracts across all types of climate mitigation projects, shortening deal timelines from years to under a year.
SPONSOR’s global platform serves as a one-stop shop where developers, financiers, EPC contractors, lawyers, governments, and consultants can find each other and collaborate. “Humanity didn’t need a miracle technology to solve the climate crisis. Solar, wind, and batteries are already cheap and effective. What we needed was a platform to scale them fast,” said Grimm. Already, more than $20b in projects have been onboarded, with expectations to surpass one hundred billion by the end of the year.
The cooperative model matters
Unlike other fintechs, SPONSOR is structured as a cooperative and as a social impact company (SIS) in Luxembourg. This means every user, partner, and team member is also an owner, with one person, one vote, and at least half of profits reinvested in the mission. “Cooperatives are legal entities designed to solve problems for their members. The climate crisis is a problem for all of humanity, so the global cooperative model was the obvious choice,” said Grimm.
Luxembourg, with its concentration of financial institutions and its reputation as a hub for sustainable finance, was chosen deliberately as SPONSOR’s home. The country is host to the world’s largest green bond exchange, offers legal frameworks that enable innovative cooperative structures, and supports startups through organisations such as the Luxembourg House of Financial Technology.
“We were honoured to win the Catapult: Green FinTech programme, organised by the Luxembourg House of Financial Technology and the Ministry of Finance, it was a great programme, with great support, and I encourage everyone to apply,” said Grimm.
Harnessing AI for climate finance
Applying artificial intelligence to such a complex, highly regulated industry comes with its own challenges. Confidentiality of project documents such as power purchase agreements, along with the cost of indexing them, remain obstacles. SPONSOR addresses this by curating a vetted, transparent knowledge base accessible to all users and training its AI directly on these materials.
“We thoroughly test every AI response before launching a new feature. Transparency, trust, and accuracy aren’t optional, they’re essential,” said Grimm.
Much of SPONSOR’s pipeline is in developing regions, where the need for capital is most urgent but investor confidence is often lowest. The company is leveraging tools such as political risk insurance from the World Bank’s Multilateral Investment Guarantee Agency to make projects bankable in these markets. “Structured properly, these products go a long way to addressing risks in emerging markets. We’ve closed deals in some of the toughest markets, and we’re applying that experience globally,” said Grimm.
With more than $20b in projects already on the platform, discussions with governments are expected to bring hundreds of billions more into the pipeline over the next several years.
As SPONSOR scales, its ambitions extend beyond project finance. “Addressing the climate crisis is the greatest economic opportunity since the Industrial Revolution, and we want everyone to share in the benefits,” said Grimm. Regulatory approvals and licences are still ahead, but the groundwork is already being laid for these innovations.
SPONSOR is part fintech startup, part cooperative, part global movement. “You generate way better outcomes by solving the climate crisis than by accelerating it. The opposite belief is the myth we’re debunking every day. We built SPONSOR so everyone can win, together. Join us in solving the climate crisis at https://app.sponsorgo.com/,” said Grimm.
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