MCJ Collective LP Report (Q4 2022)
Core Fund IX, Opportunity Fund IV
In the spirit of transparency, we are publishing as much of the contents of our quarterly letter to our Limited Partners (the investors in our MCJ Collective venture funds) as allowable from a confidentiality standpoint. Here is our full public report from Q4 2022 and of course you may always view our publicly announced MCJ Collective investments on our portfolio page. We hope you enjoy the insights herein.
Dear MCJ Collective LPs,
We hope your 2023 is off to a great beginning. After nine quarterly rolling funds, we have made our final rolling fund investments as of December 2022 and, after a January 2023 first close, we are live with our next fund vehicle, MCJ 2023, L.P. (“MCJ 2023”). Our final Q4 2022 rolling funds backed 10 companies, of which 3 were follow-on checks from our existing portfolio, and we could not be prouder of our final rolling fund investments. In the report below, you will find more information and details about these latest investments as well as updates and asks from founders across the 80 companies (!) in the MCJ portfolio. Prefacing the report, we want to highlight several important updates.
An Update on MCJ 2023
Having held our first close in late January and with over $50MM hard committed, we are now deploying capital from the new fund while continuing to have active conversations with prospective LPs. We are grateful that over 80% of existing rolling fund LPs elected to continue participating with MCJ and we have turned our attention to institutional investors, including climate-motivated family offices, corporate strategic investors, and fund of funds. Given how well-connected MCJ LPs are, we have the following ask: if you know of any strategic individual, family office, or institutional investors that may be interested in learning about MCJ, please let us know.
Prospective LPs can submit their inquiries here on our website or send them to us at fund@mcjcollective.com.
New Podcast Series: Climate Capital
After a brief hiatus, Jason is returning to the mic and launching a new podcast series to interview the leading allocators of capital in climate tech. The goal is to understand the work of those moving private money into climate be they venture funds, family offices, endowments, private equity, or other sources of institutional capital. Like with our other series, we hope to demystify this critical segment of the climate tech ecosystem. Do you know or recommend anyone who would be a great fit as a guest on this new series? Let us know by dropping us a note at info@mcjcollective.com.
With gratitude,
Jason, Cody, David, Yin, and Thai
Portfolio Updates
Mill (FKA “Chewie Labs,” Core Fund Q4 '20, Q1 '22 & Opportunity Fund Q1 '22) debuted its smart kitchen bin that turns food waste into food grounds that can be used to feed chickens. As part of the launch, founders Matt Rogers & Harry Tannenbaum were featured in Bloomberg (PDF). We recently announced our investments in Mill here.
Lightship (Core Fund Q2 '21 & Q2 '22) recently launched its electric travel trailer, the L1, at SXSW and announced that it’s accepting order reservations!
Planet FWD (Core Fund Q4 '20, Q2 '21) announced that Patagonia Provisions would be acquiring the company’s climate-friendly snack brand, Moonshot.
WattBuy (Core Fund Q3 '21) announced a partnership with Redfin to enable homeowners to estimate cost-savings from installing rooftop solar.
Air Company (Core Fund Q1 '22) was featured in Fortune as part of an article reporting on efforts to produce “green rocket fuel” and, relatedly, its CEO spoke on CNN about how they’re partnering with the aviation industry. In addition, it recently announced a deal with the U.S. Air Force to provide it with technology to produce the company’s formulated sustainable aviation fuel. The deal is worth up to $65MM.
Tender (Core Fund Q4 '21) and its mission to advance the adoption of alternative protein was featured in the Boston Globe.
Heirloom (Core Fund Q1 '21 & Q1 '22) was interviewed on CNBC about their limestone-based direct air capture technology. Additionally, in a world first, the company announced that it has partnered with CarbonCure to capture CO2 and successfully sequester it in concrete. You can read the Reuters story here.
Waterplan (Core Fund Q3 '21) was the focus of a Harvard Business Review article on businesses’ exposure to water risk.
Pachama (Core Fund Q2 '21 & Q1 '22) announced its partnership with Verra, the world’s leading carbon offset verifier and standards program. Pachama’s CEO recently participated in a podcast discussion on the topic of forestry carbon offsets.
Living Carbon (Core Fund Q2 '21) announced its $21MM Series A led by Temasek and included participation from Toyota as well as Lowercarbon Capital and others.
Hoxton Farms (Core Fund Q3 '22 ) was recently featured in an interview on the BBC.
Sublime Systems (Core Fund Q4 '22) was featured in an article in the MIT Technology Review about its low-carbon cement. Sublime’s CEO spoke about the company in a recent podcast episode.
Basigo (Core Fund Q4 '22) announced the delivery of electric buses as part of its partnership with SasaPay and Invesco Assurance Company Limited.
Companies Backed in Q4 '22 from MCJ 2020 (aka Core Fund IX)
Spanning ultra-low carbon cement to microbial methane sequestration, the Q4 '22 instance of MCJ 2020 fund, (“Core Fund IX” or “Core Fund”), backed ten audacious companies tackling climate change. We’re including below a subset of the companies, whose rounds we’ve previously announced.
(Seed) Basigo (Sector: Mobility & Transport) is deploying a network of fully-electric passenger buses in countries such as Kenya and elsewhere in East Africa. We invested $250K in Basigo’s Seed+ round which was led by Trucks VC. The public announcement is here and you can listen to the Startup Series interview here.
(Series A) Sublime Systems (Sector: Industrial & Manufacturing) is making ultra low-carbon cement to address the 8% of the world’s carbon emissions generated from cement production. The company is replacing the industry’s legacy fossil-fueled kilns with an electrochemical process that creates cement at ambient temperature. The result is cement that not only has lower embodied emissions and requires less energy, but is also more durable and economical than conventional Portland cement. We invested $250K in Sublime’s Series A round, led by Lowercarbon with participation from Energy Impact Partners. You can learn more about the company in our earlier announcement. The round was featured on Bloomberg (PDF) and founders Dr. Leah Ellis and Dr. Yet-Ming Chiang shared more about their vision in a blog post here. Leah was a guest on the podcast, and MCJ Chairman David Aronoff has a long-standing relationship with Yet-Ming and backed him in a previous firm.
Capital Deployed in Q4 '22 from MCJ 2020 aka Core Fund IX
$2,389,665.72 deployed
Companies Backed in Q4 '22 from MCJ 2022 Opportunities (aka Opportunity Fund IV) and MCJ 2020 (aka Core Fund IX)
Co-investing alongside MCJ 2020, the Q4 '22 instance of MCJ 2022 Opportunities (“Opportunity Fund III” or “Opportunity Fund”) backed three existing portfolio companies. Since our initial investments into these companies, they have each continued to execute exceptionally well, hit key milestones, and capture strong customer interest. Because none of the financing rounds have been announced publicly, we’re unable to disclose them at this time. As always, you can view all publicly announced companies MCJ has backed on our website’s portfolio page.
Capital Deployed in Q4 '22 from MCJ 2022 Opportunities (aka Opportunity Fund IV)
$2,267,429.76 deployed
Disclaimers
These materials do not purport to be all-inclusive or to contain all the information that a prospective investor may desire in investigating the MCJ 2023, LP or any parallel fund thereto (collectively, the “Fund”). These materials are merely for preliminary discussion only and may not be relied upon for making any investment decision with respect to the Fund. Rather, prospective investors should rely upon the Fund’s definitive agreement of limited partnership and their own independent investigation of the Fund. In the event that any of the terms of this presentation are inconsistent with or contrary to the agreement of limited partnership, such agreement shall control. The limited partner interests in the Fund have not been registered under the United States Securities Act of 1933, as amended, or under any applicable state securities laws, nor have such limited partner interests been approved or disapproved by the United States Securities and Exchange Commission (the “SEC”) or the securities regulatory authority of any state or other jurisdiction. Neither the SEC nor any commissioner of any such state authority or other jurisdiction has passed upon the accuracy or adequacy of this presentation, and any representation to the contrary is unlawful.
This presentation does not constitute an offer to sell or a solicitation of interest to purchase any securities or investment advisory services in any state or in any other jurisdiction in which such offer or solicitation is not authorized. The case studies and the companies (including sample investments) profiled or discussed in certain sections of this presentation represent a subset of the firm’s prior investments and may not be representative of the firm’s investment experience or performance as whole. Please refer to the materials in the data room for details regarding the full investment performance of the firm. While all the information prepared in this document is believed to be accurate, the Fund and its affiliates make no representation or warranty as to the completeness or accuracy of the information in this document and accepts no responsibility.
An investment in the Fund is speculative and involves a high degree of risk. Opportunities for withdrawal and transferability of interests are restricted, so investors may not have access to capital when it is needed. There is no secondary market for the interests, and none is expected to develop. An investor should not make an investment unless it is prepared to lose all or a substantial portion of its investment. The fees and expenses charged in connection with this investment may be higher than the fees and expenses of other investment alternatives and may offset profits. Nothing presented herein is intended to constitute investment advice, and no investment decision should be made based on any information provided herein.
Past performance is not indicative of future results. Prospective investors should carefully conduct their own investigation of the Fund before making an investment. Past performance is not necessarily indicative of future results, and there can be no assurance that the Fund will achieve comparable results or that the Fund will be able to implement its investment strategy or achieve its investment objectives.
Certain performance data reported herein reflects gross returns. Management fees, carried interest, taxes, transaction costs and other expenses associated with the investments are not included in such gross performance data, and such amounts in the aggregate are expected to be substantial and would reduce the returns of fund investors.
