A Clear Decision — Why We Invested in AeroShield Materials
MassMutual Ventures has invested in AeroShield Materials, a spin-out from MIT. This is the second investment from our $150 million Climate Technology Fund. AeroShield recently announced they were selected for a major grant from the US Department of Energy to accelerate their development of energy-saving window technology. Below, we explain the factors that led to our investment decision.
Windows — An Under Appreciated Climate Solution
The core of MMV’s climate investing strategy is to collaborate with exceptional founders developing climate solutions that have been historically underfunded. According to the US Department of Energy, buildings account for over a third of US greenhouse gas emissions. Windows are the least insulating part of the building envelope and losses through windows account for roughly 30% of heating and cooling energy consumption in buildings. Despite this outsized impact on GHG emissions and energy use, the built environment received less than 8% of total climate investment between 2020–2024. Window technologies specifically receive an even smaller fraction of funding — far less than other climate technologies such as batteries and electric vehicles — but multiple innovative technologies have shown promise to improve the energy efficiency of windows. This includes dynamic glazing, next-generation vacuum insulated glazing, and transparent insulating materials like AeroShield.
Increased Focus on Energy Efficiency Is Driving Window Standards
Rising power prices, enhanced building standards, and net zero goals are prompting building owners, property developers, and tenants to focus on energy efficiency.
In particular, new tax credits from the IRA for Energy Star rated windows are creating a tailwind for the next generation of energy-efficient products. Energy Star is a longstanding public-private partnership that has become the leading standard for energy efficiency; more than 90% of US households recognize the Energy Star label. Every 3–5 years the requirements to meet Energy Star get more stringent and for windows, this means improving the thermal insulation. Since the newest Energy Star specification went live in October 2023 (windows 7.0), virtually no double-pane windows meet the new criteria for homes in the northern half of the United States. The only incumbent choice is a triple pane window which can achieve higher R-values, but is also more expensive and heavier, which can create installation challenges. As Energy Star standards continue to rise, the window industry needs new solutions that can provide next-level energy efficiency in a familiar form factor at a cost consumers can afford.
Multiple Innovation Pathways Exist for Windows
There are two sources of heating and cooling loss in a window — the frame and the insulated glass unit (IGU). We focused on the IGU as the component with the greatest potential to boost energy efficiency. As we researched the market, we observed three broad technological approaches to enhance IGU thermal efficiency: advanced insulating materials, vacuum-insulated glass, and electrochromic technology (i.e. dynamic tinting). While these window technologies are not mutually exclusive and could work in combination, we decided to focus on insulation materials, given their broad applicability in both residential and commercial window markets. Vacuum-insulated glass and electrochromic solutions tend to be focused on the commercial market. We believe the residential window industry — with high volumes of standardized products, regular replacement cycles, and well-defined production and distribution channels — will make it possible to scale window insulation technology that could fit into the existing value chain.
The AeroShield Solution
Based on research from MIT, AeroShield Materials has developed a transparent silica aerogel insulation layer for windows. At scale, the company’s patented technology and proprietary manufacturing process will enable window manufacturers to deliver state-of-the-art thermal performance and energy savings at an affordable price. AeroShield’s aerogel layer can be applied to glass and put inside standard double-pane windows or doors to improve energy performance by up to 65%. At scale, AeroShield’s products will be an economically superior option for the end-user.
Here is how AeroShield compared to the key criteria we use to evaluate climate tech hardware opportunities:
1. Exceptional founders. The team at AeroShield strikes the right balance between financial and mission-based goals and has assembled the technical, operational, financial, and commercial skills required to scale their business and work with leading players in the window industry. We were impressed at the founding team’s high EQ and focus on building a strong corporate culture.
2. Disruptive technology. Aerogels were developed in the 1930s and are used in a wide variety of commercial applications. AeroShield’s technical breakthrough was creating a transparent and uniform aerogel. Next, they were able to increase the size of their aerogel units to meet industry standards and develop a proprietary process to adhere the fragile aerogel material to standard glass units.
3. Competitive stand-alone economics. We believe that at scale, AeroShield can deliver best-in-class insulating performance at a competitive cost. In short, the company has the potential to deliver a product with triple-pane performance at a slight cost premium to a double-pane window.
4. Change transparency (literally). By integrating into existing window products, an end-user of a window with AeroShield insulation would be unaware of any change in the clarity, weight, durability, or functionality of the window, but would experience real energy cost savings.
5. Standard form, fit and function (FFF). Windows with AeroShield insulation will have the exact form factor as today’s double-pane windows. We expect AeroShield-based products to compare favorably with more expensive, thicker, and heavier triple-pane windows. From a production standpoint, AeroShield insulation can be integrated into existing double-pane production lines. Manufacturing triple-pane windows requires different processes and equipment, adding cost and complexity.
6. Thoughtful IP strategy. AeroShield has done an exceptional job of balancing the need to license and file for new patents with developing trade secrets based on manufacturing know-how.
AeroShield is an early-stage company that has positioned itself for long-term success. Its technology makes it possible to deliver next-level energy efficiency, through existing production processes, at a competitive price for consumers. By collaborating with large window manufacturers, AeroShield has the potential to scale quickly in response to industry and environmental challenges. The US Department of Energy recently recognized AeroShield’s potential with a $14.5 million ARPA-E SCALEUP grant to support the company’s build-out of a new facility and initial product launch.
We look forward to working closely with AeroShield to build a business with lasting impact.
