CleanJoule’s 14-Year Bootstrap: Why This $55M Climate Tech Company Avoided VC Until 2023

Every founder building deep tech hears the same advice: raise venture capital early, scale fast, show traction. Mukund Karanjikar ignored all of it.

In a recent episode of Category Visionaries, Mukund Karanjikar the CEO of CleanJoule, a sustainable aviation fuel producer that’s raised $55 million, revealed why his company went 14 years without taking a single dollar of venture capital. From 2009 to 2023, CleanJoule funded its entire R&D operation through government contracts, building breakthrough molecular transformation technology while most climate tech companies burned through VC rounds trying to prove unit economics.

The contrarian approach wasn’t born from aversion to capital. It came from understanding a fundamental truth about deep tech that most founders miss: standard venture capital and deep tech innovation operate on incompatible timelines.

The Incentive Misalignment Problem

“Some people do need to understand that standard venture capital model may be not for them,” Mukund says bluntly. “Those early years, you don’t need as much money as you need time. 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.”

The math is simple. Standard VC firms operate on seven-year fund cycles. They need to show returns to their LPs within that window. Deep tech innovations, particularly in climate and materials science, often require longer development timelines. That creates pressure to demonstrate commercial traction on schedules that don’t align with the physics of innovation.

When you’re doing molecular transformation of biomass feedstocks into aviation fuel, you can’t fake progress. You can’t pivot to a SaaS product when the tech gets hard. You’re committed to solving the actual problem, which means you need patient capital that understands decade-long development cycles.

For CleanJoule, that patient capital came from an unexpected source: the United States government.

Why Government Contracts Aligned Better Than VC

From 2009 to 2023, the Department of Defense and other government agencies essentially funded CleanJoule’s development. This wasn’t grant money or non-dilutive funding in the traditional sense. These were contracts with deliverables, deadlines, and consequences.

“A lot of entrepreneurs do not understand that this is not helicopter money,” Mukund explains. “When Department of Defense pays you to do something, they have their hand on your throat, which means you are supposed to deliver something. It’s a contractual agreement between the government as a customer and you as the performer.”

The incentive alignment worked because CleanJoule’s innovation solved problems the government cared about deeply: national security, supply chain resiliency, and domestic energy independence. The Department of Defense alone purchases 4 billion gallons of aviation fuel annually across the world. Sustainable aviation fuel wasn’t just an environmental play. It was strategic infrastructure.

“We happened to be lucky in that way,” Mukund admits. “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.”

The Time Arbitrage Strategy

What CleanJoule gained through this approach was something venture capital rarely provides: time arbitrage.

“You just have to assume that you are going to be in it for a decade, for five years,” Mukund says. “Some of you who are lucky, maybe for a couple of years, and you hit it out of the park. But what it comes down to is first five to ten years, it’s you and the pack of wolves.”

Those early years from 2009 to 2012, CleanJoule operated with four walls, a roof, and no defined plan beyond solving hard problems in molecular transformation. They went down “many dark alleys, coming back, restarting.” By 2012, they’d won their first government contract, which provided validation and runway to keep building.

Without VC pressure to show quarterly growth, CleanJoule could focus on the actual technological breakthroughs required to make sustainable aviation fuel commercially viable. They could spend years perfecting their process, understanding feedstock optimization, and building relationships with the regulatory infrastructure that would eventually need to approve their fuel.

What to Do Instead of Raising VC

For deep tech founders considering this path, Mukund’s advice is tactical: look for strategic partnerships with entities whose incentive timelines match your innovation timeline.

“What you want to do is look for as many strategic partnerships,” he says. “You need those strategic partnerships because you are in it for that long haul.”

In CleanJoule’s case, strategic partnerships meant government contracts in the early years. But it also meant building relationships with airlines, understanding their sustainability mandates, and positioning the company as essential infrastructure for their net zero commitments by 2050.

When CleanJoule finally raised their Series A in 2023, the cap table reflected this strategic approach. Three airlines from three countries participated: Frontier in the US, Volaris in Mexico, and Wizz in Hungary. These weren’t passive financial investors. Each airline signed offtake agreements, committing to purchase large volumes of sustainable aviation fuel at future dates while also investing capital.

The round was led by Indigo Partners, an aviation-focused investment firm led by Bill Franke. Gen Zero, the climate tech investment arm of Singapore’s Temasek, joined alongside Clean Hill Partners, a private equity firm focused on decarbonization investments.

“We were very selective in type of investors we choose because that money is for future performance,” Mukund explains. “It’s not truly for past performance.”

The Hidden Cost of Patience

This strategy isn’t without tradeoffs. Fourteen years is a long time to operate without significant dilution or the validation that comes from major VC backing. There were moments of private frustration, proposal rejections, and the slow grind of government bureaucracy.

“You can tear that and swear within yourself, but learn from it and hit back harder,” Mukund says about reading government contract rejection reviews. The key is having conviction that you’re solving a real societal problem and that your solution will work at commercial scale, even if that scale is years away.

The other requirement is founding team stability. When Mukund left his oil and gas job in Houston to drive to Salt Lake City with his wife and dog, he was committing to a journey measured in decades, not quarters. Not everyone can or should make that commitment.

When This Strategy Works

The CleanJoule funding approach isn’t universally applicable. It works when several conditions align:

Your innovation solves problems for entities with very long time horizons (governments, utilities, large enterprises planning decades ahead). Your technology has obvious strategic value beyond financial returns (national security, infrastructure resilience, regulatory compliance). You’re working on problems where the physics or chemistry can’t be rushed, no matter how much capital you deploy. Your founding team has the patience and financial stability to operate in “dark alleys” for years.

For founders in quantum computing, advanced materials, fusion energy, synthetic biology, or climate tech, these conditions often apply. The question isn’t whether your technology is fundable through venture capital. It’s whether venture capital timelines serve your innovation, or whether you’d be better served finding customers who will pay you to solve problems on realistic timelines.

The 2023 Inflection Point

By 2023, CleanJoule had de-risked their technology sufficiently to attract the right kind of growth capital. They’d proven their molecular transformation process worked. They’d navigated regulatory approvals. They’d built strategic relationships with airlines desperate for sustainable fuel options to meet climate commitments.

The fourteen years of patience compressed into a Series A that positioned them for commercial scale by 2029. The government contracts had served their purpose: funding R&D while maintaining control and avoiding misaligned incentives.

“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,” Mukund says. By 2023, CleanJoule’s future required commercial manufacturing infrastructure, not more R&D. That’s when venture capital made sense.

For deep tech founders evaluating funding strategies, CleanJoule’s path offers a counterintuitive lesson: sometimes the fastest way to scale is to avoid the capital designed for scaling until you’ve solved the problems that capital can’t solve.