A Cool Solution for a Warming World — Why We Invested in Transaera
MassMutual Ventures has invested in Transaera, a materials-based technology platform addressing HVAC energy consumption in the built environment. This is the latest investment from our $150 million Climate Technology Fund. Below, we explain the factors that led to our investment decision.
HVAC — Accelerating Demand in a Warming World
The core of MMV’s climate investing strategy is to collaborate with exceptional founders developing climate solutions that have been historically underfunded. As we have mentioned in prior posts, according to the US Department of Energy, buildings account for over a third of US greenhouse gas emissions. Despite this outsized impact on GHG emissions and energy use, the built environment received less than 8% of total climate investment between 2020–2024. On average, 10% of the total energy consumption of commercial buildings in the United States is required for cooling. Depending on climate zone and season, the number can exceed 40%! As much as 40% of that energy is used just to dehumidify fresh air. Global demand for air conditioning units is expected to grow by 5–7% per year through the end of the decade, driven by a warmer climate and population and economic growth in emerging economies. Multiple innovative founders and technologies have emerged in the past few years to address the cooling problem. The solutions include new refrigerant materials, next-generation evaporative technologies, and both liquid and solid desiccant processes. MMV is exploring many of these approaches but has focused on desiccant technologies as the most compelling near-term solution. Transaera has launched a unique solid desiccant product that has a faster path to market than many next generation material solutions with a form factor that is more consistent with existing products and building structures.
The Solid Desiccant Solution
All desiccant HVAC systems remove humidity from air prior to cooling, either by putting it in contact with a liquid “salt” solution or over an adsorbent “sponge” material. Both processes require regeneration of the desiccant after it is saturated, usually using heat and/or pressure. Liquid desiccant systems are often challenged by weight, size, and complexity; traditional solid desiccants have lacked the necessary adsorption properties to remove humid air and regenerate the materials efficiently.
In recent years, a new class of highly adsorbent materials, metal organic frameworks — or MOFs — have been applied to the solid desiccant approach. MOFs are a class of materials with a very large surface area that incorporates a metal base, and an organic binder configured to adsorb and desorb a specific molecule, in this case water in vapor form. Some MOFs can also be designed to desorb — or regenerate — at a very low temperature/pressure differential. The MOF is applied to a substrate which can take various forms and is then incorporated into a traditional HVAC system.
The Transaera Product
Guided by research into MOFs by a co-founder and professor of Chemistry at MIT, Mircea Dinca, Transaera has developed a solid desiccant platform technology with multiple possible applications. Industrial and commercial HVAC is the first market for the company’s first commercial product: a 20- to 30- ton DOAS rooftop air conditioning unit. While the Transaera technology will eventually be available on all rooftop air conditioning units, efficiency gains are more pronounced on the DOAS — or Dedicated Outdoor Air System — market because of the amount of fresh air requiring dehumidification. The dehumidifying — or desiccant — component of the air conditioning unit is configured as a wheel, very common in the HVAC industry, which allows it to regenerate the material and desorb the water vapor in a very efficient and factor friendly way. The company will initially manufacture entire systems, but over time may move to a component strategy and integrate with OEMs and the existing sales and distribution infrastructure.
At scale, the company’s proprietary technology and manufacturing process will enable building owners to materially decrease the energy costs of cooling commercial and industrial properties. Over time, the company may have actional opportunities in the residential and automotive sectors, among others. Transaera’s products will be an economically superior option for the end-user.
Here is how Transaera compared to the key criteria we use to evaluate climate tech hardware opportunities:
1.Exceptional founders. The Transaera team is a strong blend of exceptional entrepreneurial, scientific, engineering and industry talent, led by Sorin Grama, Ross Bonner, and Mircea Dinca. They have the skills to scale their business and collaborate with leading players in the HVAC industry.
2. Disruptive technology. Metal organic frameworks (MOF) were first developed in the 1960s and are used in a wide variety of commercial applications. Transaera has explored a wide range of potential MOF combinations and has focused on one that is widely available commercially. The technical breakthrough was the formulation and application of substrates and binders that allow for a product that is durable, compact and economically attractive to the OEM and end-user.
3. Competitive stand-alone economics. We believe that at scale, Transaera can deliver best-in-class desiccant performance at a competitive cost. In short, and depending on geography, the company has the potential to deliver a 2–3-year payback in energy costs.
4. Change transparency. Because it is integrated into existing HVAC product, distribution and servicing models, an end-user of a DOAS unit with a Transaera solid desiccant wheel would be unaware of any change in the weight, size durability, or functionality of the unit, but would experience real energy cost savings.
5. Standard form, fit and function. Air conditioning units with a Transaera solid desiccant wheel cartridge will have nearly the same form factor as today’s existing standard units. Other desiccant products are typically larger, heavier, louder, or require reconfiguration of existing rooftops.
Transaera can deliver real economic value to end-users without subsidies, conform to existing form factors and building infrastructure, and scale operations through partnerships with leading industry players. As a financial VC fund within a leading financial services and asset management firm that includes a large real estate portfolio, we look forward to supporting Transaera with capital and connections as they deliver solutions to the global cooling challenge.
