The following interview is a conversation we had with Mukund Karanjikar, CEO of CleanJoule, on our podcast Category Visionaries. You can view the full episode here: $55 Million Raised to Power the Future of Sustainable Aviation Fuel
Brett
Hey, everyone, and thanks for listening to Category Visionaries. Today we’re speaking with Mukund Karanjikar, CEO of CleanJoule, a sustainable aviation fuel producer that’s raised 55 million in funding. Mukund, how are you?
Mukund Karanjikar
I am doing wonderful, Brett. How are you?
Brett
I’m doing great, and I’m super excited for this conversation. So this interview is a little bit different from a lot of the other founders that I normally talk to. I was telling you in the pre interview there, normally we speak to SaaS founders. Normally, it’s early stage. I know your journey starts much earlier than a couple of years ago. So let’s go ahead and go back to the founding of the company. Take us back to the idea that you initially had.
Mukund Karanjikar
Absolutely no. Again, thank you so much for having clean Jule on and looking forward to this conversation. Brett. So we, for a number of years, we had dealt with what we call deep tech, what everybody else calls deep tech heart take. Essentially, it’s about making real materials to solve a real world problem. I’m a chemical engineer by training, so I could not write a code to save my life, though the industry we deal with. So a natural home for me would be like a petroleum industry or a petrochemical industry where polymers are manufactured by million metric tons. And so as a scheme, I was always driven by sustainability and impact of human operations on sustainability. Right. So it’s planetary sustainability, it’s life sustainability and the impact of human actions. If you go back, we decided to drill petroleum in 1859. Standard oil.
Mukund Karanjikar
The rest of it is history. And we designed a modern lifestyle around petroleum crude. This gunky, darken, nasty looking substance that we take out of the ground ten mile below sea level. And I don’t believe that’s how it should have happened ever. So I always question number one, my life choices, whether it was good to be a chemical engineer. But now that I was one, what can I do with it? So we wanted to turn the paradigm of fossil based human life to sustainable, raw material based human life. And aviation is right in the middle of it. It contributes not only to a betterment of our civilization, but it’s also, as some people say, hardest to decarbonize. So we made our life’s mission to decarbonize the planet. Let’s start with aviation as an industry.
Mukund Karanjikar
And those were some of the early thoughts that we started on this journey with.
Brett
Now let’s talk about the history a bit more and maybe we can break it up into milestones. So I do have a helpful guide from your website to kind of break through these or work through these milestones. But let’s talk about that initial period, 2009 to 2012. Take us back, what was going on.
Mukund Karanjikar
So, yeah, so we, I used to work in oil and gas industry. Before that, I ran into a serial entrepreneur out of Salt Lake City, Utah. He asks me, the gentleman is in his eighties now, and he’s been a lifetime entrepreneur in deep tech. And he asked me, how do you like working in oil and gas? And I says, I say it is pretty boring because working in a large oil and gas company is like working for the government in the sense of the bureaucracy of it. So he’s like, okay, why don’t we come to Salt Lake City and we’ll do something together? Something was never defined. There was no actual plan on paper, but just the fact that I had an opportunity to work with someone who has done this ten times over.
Mukund Karanjikar
The wife and the dog are in the car and away we start driving from Houston, Texas, and here we are in 2009. And then all we had was four walls and the roof. And then this, the first three years where lot of ideation adds to what to go after, what’s important, both from the viewpoint of our expertise that we can meaningfully contribute and from the viewpoint of what’s relevant, what. And then the third 3rd objective was what would be impactful. So being a chemical engineer, I know how to build molecules, right? So I take feedstock and we do what we call in our jargon, molecular transformation. So a becomes b, and b does not look like anything that a started out with. So with my sort of a mental frame of those asset of expertise, I have always been driven by sustainability.
Mukund Karanjikar
So we decided to jump into what is hard to decarbonize and long haul transport is very hard to decarbonize. That goes both for, by the way, large trucking industry. I know a lot of people these days are talking about using batteries for long haul trucking and power to them. I think there is some truth to that. But energy dense hydrocarbon building for mature industries is the most impactful aspect of pursuing sustainability from the viewpoint of what is that we are going to disrupt, and that would be building molecules in a new way from different and sustainable feedstock. So those three years were lot of going down many dark alleys, coming back, restarting, and were confident. That most important piece of those three years, I remember, is were learning every day there was something new every day. And that’s what kept us going.
Brett
We.
Mukund Karanjikar
But then we are at 2012, and we thought we hit gold right by then in at least framing the problem.
Brett
What did it feel like to win that first government contract in 2012 that had to have felt like validation for everything you had just spent the last three years on?
Mukund Karanjikar
That’s exactly correct, Brett. I mean, it wasn’t a very large contract, but it was an instant gratification and instant ratification that other people, because, see, the. A lot of entrepreneurs do not understand that this is not helicopter money. When Department of Defense pays you to do something, they have their hand on your throat, which means you are supposed to deliver something. You are supposed to make it happen. It’s a contractual agreement between the government as a customer and you as the performer. So if you win that’s half the battle. Now you just have to get into the lab and start making the proverbial material that you thought you were going to make using their funds. So it was the ratification of what were up to, I think was substantially meaningful.
Brett
Like many people listening in, I’m sure for myself here, the extent that I understand what it takes to win a government contract is probably just from watching that movie war dogs. I don’t know if you’ve seen that, but that’s about as far as my knowledge goes. But I know there’s interest from a lot of founders these days about winning government contracts and kind of working in that ecosystem. You’ve obviously been doing it a lot. What have you learned from that process. And then what advice would you have for other founders who are trying to navigate that world?
Mukund Karanjikar
Yeah, I would say the very first virtue that you need is patience. You may have the next best idea after sliced bread, as it is proverbially known in my world, but it is still the next best idea. It wasn’t what’s in the practice. A lot of people do not understand. Government does not move at the same rate as a starry eyed entrepreneur wants to move. He or she may want to change the world in six months. That’s not how government works. So first virtue for all the entrepreneurs who may be listening is have the patience. It’s very easy for me to sit here and reflect back, saying have the patience, because there are a lot of frustrations that you run into as you move along, because it’s not always a win.
Mukund Karanjikar
There are some losses along the way, but some total of it is have the patience and then the grit and determination. If you think you have a mousetrap that is going to solve a real societal problem and have a solution for the government to implement, you got two. For one, the implementation of your solution that you have such a strong conviction about, that’s what gives you the money to work on solving the societal problem that you have secondary conviction about, that you are in it for the long haul. Those are the three characteristics. You just have to be patient. You have to have the grit and determination to get through that journey. Do not. Along the way, you can have private frustrations. It’s okay to have that. Oftentimes. I have taken what we call reviews.
Mukund Karanjikar
So you submit a government proposal, the proverbial proposal, and you get reviews of why it got rejected. You can tear that and swear within yourself, but learn from it and hit back harder. You read some of these LinkedIn posts by people, oh, government doesn’t move fast. But there is a reason government doesn’t move fast. They are supposed to care for everybody. It’s not between two entrepreneurs and one vc and a dark room. It’s about society, changing society, governing innovations that the entrepreneurs are out there to offer. And government realizes it, by the way. They are slow, but they are slow by a design. And so you just have to be at it for the long term.
Brett
Yeah, I almost don’t want the government to be fast. I mean, like, maybe apart from the DMV. I would like the DMV to be faster, but everything else, it would almost be a bit concerning if it was too fast and too easy. I think there needs to be some type of barrier there.
Mukund Karanjikar
Oh, you are 100% right. And I think that barrier does two things right. One is it doesn’t let pass non optimal solutions, but even optimal solutions when they are about to pass. It’s like that large diamond they just found in. In one of the diamond mines there. It’s not shined diamond. It is the largest diamond, but it still is kind of worthless until it is properly shined. It’s the same thing. Your innovation may be that largest diamond, but until it is going through that process of shining it, you really don’t have a value on it. It’s the same thing. So, to your exact point, Brett, the barriers are there for a reason. One is letheme. Let’s auto eliminate things that are never going to work and things that are going to work, let’s make those even more robust.
Brett
Something else I want to ask about is just the shift that you’ve seen since initially starting to work on this problem. So if we just look at sustainability as a whole, the media conversation, the corporate focus, it seems like that’s been somewhat recent. In 2009, were people really talking about sustainability that much?
Mukund Karanjikar
So 2009 was, unfortunately, this is, again, you know, you get hit with something on your head and you start things on the wrong time. 2009 was actually unfortunate time, right. This was after the 2008 crisis. And lot of people where, you know, it’s human tendency, right. We want to solve imminent problems. What’s in front of us right now that needs to get solved. It’s not about the vision of what happens in 2050, but if you dial back a few years before that, Brett. So this is what we call Klintek 1.0. And I lived through that as well. So Clintech 1.0 was oil prices started going through the roof in the early two thousands. So if you dial back all the way to 98, by the way, petroleum crude was $10 a barrel, nobody would believe that. Cheaper than water.
Mukund Karanjikar
And then you start fast forwarding into the early two thousands, and you are mid two thousands now in the first decade of two thousands. And petroleum crude is like $70 a barrel. And then everybody now waking up to the fact that the way it is going is non sustainable on pricing and its impact on human society. So that’s when we started talking about sustainability in a big way. It started more as an alternative to petroleum based lifestyle. And Clintech 1.0, then, you know, the IPCC report and going back to. There are a lot of conventions before Paris. Paris is well known because most countries adopted it. This is the United Nations Convention on Climate Change, Paris got ratified by 180 or so countries.
Mukund Karanjikar
But prior to that, there were many United nations convention and it was limited to a certain faction of the society who knew this is coming. But after went through that dark period of 2009 and first few years of 2010, you are absolutely right. That’s when people started seeing sustainability as a total undercurrent for creating new industries of the future. That’s when entrepreneurs and the next set of investors got excited about heart take and deep take and what that means to us as a society.
Brett
How does that work with finding the right investors? Because I would have to imagine it’s not going to be standard venture investors. Because I think how I understand it, at least most venture firms operate kind of on like a seven year time horizon per fund. And that seems almost anti to the deep tech model. How do you find the right investors?
Mukund Karanjikar
Yeah, that’s a very good point, Brett. And I think some people do need to understand that standard venture capital model may be not for them. So this is going back to our genesis. To not raising fund all the way until 2023 is those early years. You don’t need as much money as you need time. And you just have to assume that you are going to be in it for a decade, for five years. Some of you who are lucky, maybe for a couple of years, and you hit it out of the park. Because the pedigree of the innovation of the technology maybe goes back to some academic institute that somebody worked in their dark labs for so many years. But what it comes down to is first five to ten years, it’s you and the pack of wolves. That’s basically it.
Mukund Karanjikar
And what you want to do is look for as many strategic partnerships. In our case, were somewhat lucky because what were solving major problem which is sustainable innovation, relates to the us government a lot more. Not only from the viewpoint of creating new industries, but it has undercurrents of national security, supply chain resiliency. Our Department of Defense buys 4 billion gallons of aviation fuel every year in all sorts of countries around the world. So we happen to be lucky in that way. The mousetrap we chose to work on happened to be so relevant for the us government that they literally almost undertook all our development from 2009 to 2023. That’s the period that most entrepreneurs who think of doing deep tech, you know, heartache, they need to be cognizant of the x axis each time.
Mukund Karanjikar
The y axis you may never see, and which may have dollars on it, you may never see a bar that says you spent any meaningful amount in any given year. But year is a year, so you have to get through that time period. And then I would say skip the standard venture capital investment all along, forget about that, because they are not going to be your friends in the journey to come. See, money raising is not a reflective exercise. It’s very prospective, it’s what you raise it for, what you need to do in the future. You can celebrate that evening, go out and drink, and that’s great. But that money is for the future. Can you get to the future? And that’s when you need a lot of strategic partnerships.
Mukund Karanjikar
In our case, if you look at the standard news release we had about our fundraising in 2023, we have three different airlines. Since we are in the business of sustainable aviation fuel, we have three different airlines, Volaris, Frontier and whiz, headquartered in three different countries. Frontier is in the US, Volaris is in Mexico City in Mexico and Viz. Is in Hungary, eastern Europe. And you need those strategic partnerships because you are in it for that long haul. Then on the money side. So not only our airlines gave us what we call off tech agreements, meaning they agreed to buy large volume of what we produce at a future date. They also participated in our series a strategic investment raise. And then on additional funding side. The funding round was led by Indigo Partners out of Arizona. They are a very prolific player in aviation.
Mukund Karanjikar
And the firm is led by a gentleman by the name Bill Franke is an absolute visionary. And so they led the round. They have a lot of money of their own that they put into three airlines participated. And then Gen Zero, which is climate tech investment arm, sustainability based, focused investment arm of Temasek, the fund out of Singapore, they are an investor as well. And then another private equity firm out of New York, Clean Hill Partners, whose whole objective is decarbonization investment. So were very selective in type of investors we choose because that money is for future performance. It’s not truly for past performance.
Brett
This is probably a dumb question, but I have to ask it anyways. What has to change in the airplane to be able to use this type of fuel?
Mukund Karanjikar
Nothing has to change. Actually, that’s the beauty of what we do and what generally is known as sustainable aviation fuel. It is just sustainably produced, almost identical looking hydrocarbons. In our case, they are superior looking and we can get into that. But you want similar to superior performing hydrocarbons that are dropping. Now, drop in is a simpler term for infrastructure compatible. See we 1859 Petroleum, 1903 Wright Brothers Flyer. So no matter which way you parse this equation, you are looking at multiple decades of development, at least a century in case of aviation and couple of centuries in case of petroleum crude based jet fuel manufacturing. So what you want to do is do not.
Mukund Karanjikar
You’re already solving a very hard problem, which is can I make new type of hydrocarbons and compete with an extremely efficient industry called oil and gas because the planet is heating up and climate change is important. And then, by the way, while we are at it, can I also sell it to an extremely conventional but highly efficient industry called aviation that hesitates to change anything. You go to them and you say, I do not want you to change anything. Just buy a different barrel of the fuel. It’s fully infrastructure compatible end to end.
Brett
When we look at any industry and you can look at EV’s or anywhere that sustainability is happening, I feel like there’s always critics on the other side. And those critics obviously normally have an incentive to criticize. What do the critics say about this approach? Or are there no critics to this approach?
Mukund Karanjikar
There are critics for everything, as you know. I mean, that’s what makes us human. If everybody likes that one thing, then it won’t be. It won’t be called humans. There are a lot of critics of this bread. The standard critic I have heard is this cost competitive with petroleum? It’s a wrong question to ask. The tense used in the question is wrong. Will this be cost competitive? Right? Because with Hardec is not. Next quarter I’m going to be cost competitive with petroleum crude. Our investors are savvy. They asked, will this be cost competitive? And hands down at commercial scale, we are more than cost competitive with petroleum crude. No issues there. But as soon as they ask you this question, is this cost competitive? And they give you one word answer, then you have to say no.
Mukund Karanjikar
And they don’t hear rest of the sentence. Then rest of the sentence for an entrepreneur is like, but. And they don’t want to hear what comes after. But. So the time value of innovation gets lost into this being a wrong question. So whoever asks you that question in present tense, they are setting you up for treating you as, oh, okay, so you are not in the prime time, you are not in the prime game. And those are the biggest critiques I have seen. If you have your heart and mind in the right place, your question should be, will this be cost competitive? And then the other critic, I often hear some people say, oh, but this is hundred billion gallon market. How are you going to disrupt it in any meaningful way? And to which I say, the targets are for 2050.
Mukund Karanjikar
It’s not for next quarter. Right. So human ingenuity has interesting way to take turns, as some economists say. You know, if you look at society changing innovation, Larry Summers is one of them, the Harvard economist. If you are looking at society changing innovations that have permanently uplifted our civilization, it has always taken longer than anybody had thought, but the impact has always been substantially larger than anyone ever dreamt of. And those are the thoughts I think one has to move by, not by the time on x axis, but given enough time, can you get there? And entrepreneurs like me and other people who are pursuing hard tech, deep tech? Absolutely, we can. You know, it’s like they say, overnight success that took 20 years to happen. It’s almost like that always in everything, hard take, deep take.
Mukund Karanjikar
So I oftentimes tune out of the noise of critics because we have a mission to accomplish and we have investors, and they have tasked us with what we have to do. It is a game changer. It is a society changer when it gets fully adopted. So I just don’t pay attention to some of those critics.
Brett
Yeah, I feel like you have to drown out the noise. Otherwise it would be impossible or very difficult in terms of commercializing this technology. Where are we today? Or maybe a better way to ask that, how far out are we from me boarding a frontier airlines flight from San Francisco to Utah so we can go on our ski trip together. How far away are we from that trip being powered by this fuel?
Mukund Karanjikar
Absolutely. So in terms of whether it works, two ways to answer that question. Whether it works today. Absolutely. You and I can take a special plane that will fly on this particular 100% SAP that does not need to be blended with petroleum. Make it essentially as carbon neutral flight as possible today, and we can make that quantity today. What’s most important is when can it be meaningfully manufactured in an economic way. And the way we break out our progress, Brett, is up to 2022 was rear view mirror period, where lot of toiling away, midnight oil burning, etcetera, solving all the technological problems. Then the engineering scale up is 2023 to 2025. You are more than welcome on your next key trip to visit us.
Mukund Karanjikar
You will see our operational plant, which is now getting fully integrated to essentially look like a blueprint for a full scale commercial manufacturing plant for which the work will begin in 2026. So you will find, come 2028, 2029, you will find a. At the corner station, the proverbial corner station, Kleenjul SAP for sale, that any airline can power it at any airport that they would want. Yes, there are infrastructure challenges that are not up to us. Other people have to resolve some of those challenges, airports, piping, etcetera, just in terms of connecting it with the manufacturing locations, not changing it or adopting it. As I said, it’s fully infrastructure compatible. So come 2029, we will have, barring any major world event between here and there, we will have a full scale manufacturing operation of manufacturing at what would be called a commercial scale.
Mukund Karanjikar
Away we go from their own geographical expansion of the manufacturing operation in various parts of the world.
Brett
One of the things that I talk about a lot when it comes to category creation is this idea that it’s not just a company that needs to be built in the category, that entire ecosystem that needs to be built, which I think that’s what you were talking about there with infrastructure. Who else has to get on board for this to work besides the airlines themselves?
Mukund Karanjikar
So the regulators have some role to play. They have to move slightly faster as entrepreneurs are moving. So SAP, as a category is not new. People have been talking about sustainable aviation fuel for a while, but the regulators have to adapt to the speed with which entrepreneurs are moving. And I’m not talking about quarters. It’s still years that they have to adopt in terms of letting more entrepreneurs feed more pipelines, both real pipelines and proverbial pipelines, in terms of innovations and what these people can do. The second aspect of the ecosystem development is the liquids industry, as I call them. To some degree, it’s oil and gas companies. To some degree, it is pipeline companies. To some degrees, it is refiners. And they have these hard assets under the ground currently and above ground. Right.
Mukund Karanjikar
So there would be a refinery, and then there would be a pipeline. So what’s called this entire midstream sector, they have to get aligned as well, because if we add SAF entrepreneurs, I manufacture it in Iowa, let’s say, hypothetically, or Illinois, where I would really like to set up a manufacturing unit, by the way, I think the governor of Illinois is just extremely progressive in terms of looking at some of these new industries and the future of sustainability. So let’s say we set up a manufacturing plant in Illinois that has to get connected into some pipeline that comes to your doorsteps, Brett in San Francisco. And we have all that network in this country. So FAA, Federal Aviation Administration, just released a number of funded projects not.
Mukund Karanjikar
Not too far into the past year that was exclusively targeted at how do we further develop this infrastructure? So those types of companies will have to get on board and just the standard refining industry, as you call them. They have a role to play. And then the biomass processing industry, since our feedstock is biomass or waste biomass, so agriculture residue, forest residue, that’s what gives you highest degree of decarbonization, lowest possible, what they call carbon intensity. And that industry has to get aligned as well. So there are all these players and there are projects and, you know, movements happening in all those industries. But all of that has to evolve together hand in order to get to a meaningful future where we have impacted this market. Let’s say 50, 60, 70% in terms of replacing petroleum derived jet a with sustainable aviation fuel.
Brett
Yeah, we’re getting down to the final questions here. One thing I wanted to ask you, and we also talked about this in the pre interview, is this idea that deep tech is now cool. Maybe 510 years ago everyone was really building SaaS. Now I think we’re moving into this world of deep tech, or people want to build physical things. You’ve been on this journey for a lot longer than most. What advice do you have for deep tech founders who are trying to build technology and bring that technology to market?
Mukund Karanjikar
I would say start with sequestering 20 years of your life if you’re not prepared to do that. I would think twice and three times and four times. Okay, let’s say you are two x the smart, then rest of us, then start with a decade in your mind, anything short of that, if you think you are going to make a substantial impact, I think you need to search elsewhere. And I don’t mean to discourage anybody. This is very factual because I hang out with people of my kind who have given decades and decades. I mean, you know, just look at Tesla’s story, right? A lot of people don’t know where it started and how it end. It goes back to two decades and longer. It’s always going to be like that. But here is the promised land, right?
Mukund Karanjikar
The promised land is when you come out, you are not coming out with a social network for people with six toes. You are the coming up with something that changes our society, uplifts our civilization for the better. So if you, even if you have to look back 20 years later and God forbids you do not succeed, you should derive the satisfaction out of, well, I tried and I was in it for the long haul and it just wasn’t my time. I think that’s a much better solution than getting a quick, making a quick buck in three quarters from now and walking away to do something else. There is, there is a nice life and you know, power to the SaaS entrepreneurs who think like that.
Mukund Karanjikar
And I heard Eric Smith talk about other day, it received negative praise for I don’t know what reason, but the positive aspects of what he was talking about is how generative AI is going to make a difference that 15 minutes later you can decide upon a different venture. I get the point and I get the cynicism, but deep tech and hard tech is not like that. You have to sequester years and years of your life and be prepared for it. Because just in case you hit out of the park, bottom of 9th base is loaded. That’s your success. So you would distinguish yourself as an entrepreneur and as an investor too. If you are in this game for having tried something that nobody else even dared to try.
Brett
Amazing. Love that advice. And I’m sure any Founder who’s trying to build on deep tech is probably taking some notes there. Final question for you before we wrap up. What’s the future going to look like for the company? You’ll paint a picture for us of I don’t know even what time horizon to ask you on. Normally I ask people for three or five years. I feel like given how your brain works, that’s probably too short. So I’ll leave it wide open. Whatever, whatever timeframe you want to use. What’s that future look like?
Mukund Karanjikar
The future, Brett, is we are after making aviation 100% sustainable. Our customers, which are the airlines, they are fixated on net zero by 2050. And we want to go at some point after that real zero, which is not net zero where we are seeking credits elsewhere. So from my viewpoint as a SaF entrepreneur, I want to make sustainable aviation fuel affordable and available to everyone, everywhere on the planet. And while doing that, since we use biomass as the feedstock, we are looking at lifting millions and millions of people around the planet who are on the rural side of the world out of poverty forever. Because sustainability has two components. It has the planetary sustainability and the economic sustainability you enable. By using feedstocks that happen to be on the rural side of the world, you take sorts of people out of poverty.
Mukund Karanjikar
It becomes a new industry where we are truly bridging the industrial revolution of what used to be the agrarian economy of the past. While doing that, let’s make aviation 100% independent of petroleum.
Brett
Amazing. I love the vision and I really love this conversation, and I already know it’s going to be a big hit with our audience. Before we wrap, if there’s any founders that are interested in just following along with you and for the next 50 years that you’re building this technology, where should we send them? Where should they go?
Mukund Karanjikar
Oh, I am fairly active on LinkedIn in terms of inbound, so feel free to reach out. That goes to my real email box and if you should desire to have a follow on conversation, happy to do that as well. I have a very effective and efficient chief of staff who keeps me running 24/7 so happy to field any questions from your audience Brett, but feel free to reach out to me on LinkedIn. You can start there and if you dig deep, I’m sure you’ll find my email address and cell phone number somewhere on the Internet that I gave out at some point in the past. And feel free to reach out by that way too.
Brett
I’ll text you for that ski trip.
Mukund Karanjikar
Perfect.
Brett
Thanks so much for taking the time. This has been a lot of fun.
Mukund Karanjikar
Lovely. Thank you so much, Brett.
Brett
All right, that was awesome.
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