- MUUS Climate Partners invests in climate solutions and high-tech applications. This is the story behind the firm.
MUUS Climate Partners is the venture capital arm of MUUS & Co and it invests in the convergence of climate solutions and high-tech applications. The firm has a strong investment track record and decades of combined industry leadership. To learn more about the firm, Pulse 2.0 interviewed MUUS Climate Partners partner Ben Wolkon.
Ben Wolkon’s Background
Wolkon has been focused on entrepreneurship for the energy transition ever since he started developing solar projects out of his dorm room in college.
“I was a kid hooked on the idea that business could be a driving force to address climate change, and everything grew out of that. As a grad student, I was part of the MIT Sustainability Initiative, obsessed with the concept of venture capital for early-stage climate tech, which was completely out of favor at that time, so virtually no VC firm wanted to hire a climate-focused analyst,” said Wolkon
“Fortunately, I got a much better opportunity when I met Michael Sonnenfeldt, joined his team in 2016, and ultimately became his partner. Michael is a one-of-a-kind serial entrepreneur and leading climate philanthropist, who’s built billion-dollar businesses and created a uniquely powerful network, and I just became a sponge of his knowledge. We started investing in climate deals together in 2016, combining my hustle with his wisdom as we looked at various opportunities. Both of us have perhaps an unusual combination of creativity and discipline, and we share a love of debating. From our process, we’ve been fortunate to back some of the leading early-stage climate tech companies with a very high success rate. We’ve also been joined over the years by an extraordinary team, now six principals with deep expertise in this space, plus a bench of incredible advisors.”
Formation Of MUUS Climate Partners’ Thesis
MUUS Climate Partners invests in what they call the Convergence Thesis – meaning the convergence of advanced technology and climate solutions.
“Basically, we’re looking for opportunities where technology can be leveraged to accelerate the scaling of climate solutions — and we certainly do need climate solutions to scale faster!! If successful, companies using tech to accelerate emissions reduction should have outsize returns and outsize impact,” Wolkon added. “This could be AI that helps the power grid take on more renewable resources, tech-enabled renewable power producers, the nexus of autonomous and electric driving, breakthroughs in materials science, and much more. And we invest at the cusp of commercialization – right when a company has either just signed up its first customers or has a credible line of sight to that. In everything we do, we measure the emissions reduction potential using a tool called CRANE, before we invest.”
The firm had started by saying that even though the climate is the focus and venture is the interest, they would be opportunistic and willing to do some deals outside of the climate or venture buckets. So the firm did a couple of tech deals outside of climate and even acquired a small business called Phocos, which makes off-grid renewable energy solutions.
“I think those non-thematic investments made our team smarter and more capable in many ways,” Wolkon continued. “We take a multidisciplinary approach, and love applying outside experiences to our current opportunity set.”
MUUS Climate Partners Milestones
What have been some of MUUS Climate Partners’ biggest milestones?
“To me, perhaps the most important is growing our team after a few years of it just being two of us,” Wolkon answered. “We’re only as good as our people, and Logan, Tani, Kavita, and Laura all bring extraordinary talents to bear. Logan is a truly great technical mind in climate venture and was at the forefront of some of the earliest zero-emissions automotive initiatives. Tani comes from the leadership of a talent-focused tech startup backed by leading Silicon Valley firms, so she’s able to help us and our portfolio companies source world-class talent. Kavita was working on some of the most critical ESG initiatives at BlackRock. And Laura has been deeply involved in local policy around the energy transition, in addition to her background in both consulting and tech startups.”
Besides that, the firm has had a number of exits, which is the key to demonstrating its ability to do this well and ultimately attract more capital.
When I asked about specific investment success stories, Wolkon cited BrightNight.
“BrightNight is the second renewable energy venture of one of the largest renewable developers in history, and more than just being a developer, BrightNight is a tech-enabled power producer, which means the company is using unique software to create renewable energy solutions that deliver power when it is needed by the utility’s customers, rather than just solar when the sun shines and wind when the wind blows,” Wolkon explained. “As a successful entrepreneur, the founder didn’t need any outside investors at the early stage, but we came in as the sole venture investor and subsequently helped lead a process for them to raise half a billion dollars. Today, BrightNight has a pipeline of tens of gigawatts of projects, enough to potentially become one of the world’s largest power producers, with 100% renewable assets.”
Assets Under Management
Fund I – which was all internal capital – invested $30 million and is worth about 3x that today. And Fund II is a $50 million fund in which the closing was just announced.
Industry Focus
What are some of the industries that MUUS Climate Partners is focused on?
“The industries that need to be decarbonized to address climate change are energy, transportation, industry, built environment, and agriculture. We’ve made investments in all of those spaces,” Wolkon replied. “Our primary concern when we’re looking at a company is that it’s using technology to accelerate decarbonization, preferably in a way that no other company can, and that it’s at a stage that aligns with where we can be most useful, which we tend to call ‘late seeds and early A’s.’”
Distinguished From Other Firms
What separates MUUS Climate Partners from other firms?
“One is that we have an unusually diverse and unusually flat and debate-oriented organization, which I’ve found to be an incredible asset for sound decision-making. The age range across our team spans about four decades, and we are diverse not only demographically but also in terms of professional backgrounds: entrepreneurship, operations, investing, policy, etc.” Wolkon pointed out. “When you couple that with a radically transparent culture that openly debates decisions rather than making decisions behind closed doors, we think it leads to better outcomes. To date, we’ve only taken one write-down across thirty investments. We don’t approach this as a “numbers game” as some other venture investors do. We go through detailed underwriting exercises for every investment, and we would like to think that has something to do with what appears to be a lower failure rate among our investments. Admittedly, part of the reason is that we like to invest in businesses where we have visibility to commercialization, which does take risk off the table when done well.”
Plus Wolkon pointed out that they are proud of being a unique network that enables them to open doors for companies in ways that you would almost never see a small fund able to do.
“To date, we’ve helped our companies source significant follow-on capital, make key policy contacts, recruit critical advisors, and tap into top-tier talent. We’re usually no more than one or two calls away from groups our founders are sometimes trying to reach, and it gives us great pleasure to be able to help them on that front. I think it’s fair to say our networks across the academic, business, political, and philanthropic fields rival funds 10 or 20 times our size,” Wolkon noted.
Future Goals
Wolkon emphasized that everything they do traces back to the idea that as climate impact creates strong returns, they will attract more and more capital and talent into solving the greatest problem of our generation.
“With that as a backdrop, you can expect to see more of the same from us, but perhaps in larger quanta and with more great partners on this journey,” Wolkon concluded.
