A company that hopes to establish an online marketplace for trading tax credits said Wednesday that it has closed a seed funding round of more than $350,000 to develop the technology.
The New Orleans-based company, eTax Credit Exchange, plans to set up an online marketplace for the trading of tax credits between buyers and sellers in real time, while providing efficient clearing services.
“The use of tax credits by states as an economic development tool is increasing exponentially, even though the ability to participate in trading has been limited to a small group of individuals,” said eTax Credit Exchange president and CEO Peter Loop in a statement. “Through our proprietary online marketplace, we will open up this $7 billion industry to all buyers and sellers interested in taking part in this growing and compelling asset class.”
“Having an online marketplace for trading tax credits has the potential to redefine the tax credit industry,” said Tim Clawson, executive vice president of The Weinstein Company, a multimedia production and distribution company and a generator of tax credits in multiple states. “Allowing buyers to gain access to tax credits generated every year will open up the market and create a much more robust and efficient marketplace overall.”
The company was established last year in the hopes of opening up the market in tax credit trading.
The history of online marketplaces and exchanges has not always been a happy one, however, with a number of heavily funded business-to-business exchanges going out of business a decade ago after the dot-com crash.
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