Conversation with Muon's CEO, Deepanker Mahajan. Muon, based in Singapore is seeking seed capital of U$2 million, an IRR of 73% over 2.5 years.
Interview with Muon’s CEO, Deepanker Mahajan
Are consumers paying a fair price for electricity that matches their current needs?
Muon is solving this problem by optimizing the electricity tariffs through a combination of process efficiencies and cutting down the unnecessary middle layers in the electricity ecosystem. But Muon’s key aim remains to drive sustainability by providing consumers with easy to use tools to measure & control their electricity needs, provide easier access to green energy projects and reward them for adopting sustainable practices. We would like to see a behavioral change where consumers become active enablers instead of being passive receivers in the electricity ecosystem.
To achieve the above goals, Muon is employing a combination of IOT & Blockchain technologies. Using smart meters, they will measure, forecast and control the electricity needs of individuals. Blockchain will be used to collate different power sources and for enabling peer to peer electricity trades. This will spur community level investment into power generation using green technologies while reducing the load on the main grids. Muon’s blockchain will also provide cost-effective and transparent access to REC and Carbon trading markets.
AV: How did Muon Evolve?
DM: I have been deeply involved in the power sector for the last 8 years specializing in Operations Management consulting. The CTO of a company once asked me what new operations management process that can be developed. I had no answer at that point because I thought that the ecosystem worked as intended with a pocket of digitization including the automated maintenance management for operations, and financial systems for accounting and billing. I started studying the Singapore’s ecosystem deeply and realized that the system is beset with too much information redundancy. Also, the way the market works right now is that it is almost impossible for smaller generators who inevitably use alternate sources of energy to participate in the ecosystem due to the higher cost of participation. Consumers, in general, do not understand the market and hence are oblivious to alternative cheaper sources of energy. Until this changes, the idea of sustainability cannot be mainstreamed. All this spurred the idea of Muon. Our timing has also been perfect as Singapore recently has become deregulated. This opens the door for independent retailers like us to bring new innovations into the market.
AV: Can you generate a sustainable competitive advantage in the future? If so how?
DM: Muon’s competitive advantage lies in the use of technologies designed specifically for the Electricity Sector. Muon is taking blockchain out of the realm of cryptocurrency into practical real-world usage into a sector that is worth billions of dollars but still runs on archaic processes. Muon’s blockchain does not suffer from the same issues as Ethereum or Bitcoin which was specifically designed for cryptos while their usage in other businesses is an afterthought. Especially in utilities where millions of transactions are generated every day, reconciling them will be a challenge for both Ethereum and Bitcoin. For example, Bitcoin takes anywhere between 10 to 20 minutes to reconcile a single transaction. Also, both Bitcoin and Ethereum require a large amount of electricity to work which is a sort of antithesis in this space. Muon blockchain, on the other hand, works on a dual architecture where only the required information on one’s electricity consumption is transferred onto the blockchain which significantly enhances the transaction throughput while consuming a fraction of electricity. Our technology can process thousands of user electricity consumption data per minute which will be further scaled into millions. Our technology is patentable which adds to our competitive advantage. Furthermore, unlike other consortium blockchains startups in the utility space, we have a clearer vision of how to build the business. Unlike others who are experimenting with technology, we have a clear revenue generation stream where, as an independent retailer in Singapore, we can enter into the market via our platform and within six months, profits generated will be plowed back to further improve the technology. We also have a shortened time to create a network effect as our business is targeted towards consumers This also means that we will be able to generate better IRR for our investors as they can recoup their investment in a shorter span of time.
AV: Does Muon provide efficiency innovation or value innovation and how?
DM: In our case, both efficiency and value are intertwined. Muon is working on the triple goal of digitalization, decentralization & decarbonization of the electricity sector which are the three key pillars of sustainable evolution for this sector. Our aim is to drive the efficiency across different processes in value chain not only consolidation of Distributable Energy Sources reducing the load on the main grid and the operational bottlenecks but also how energy is offered to end consumers. By removing the unnecessary middle layer between wholesale electricity market and end consumers, we optimize the electricity tariffs. The value created is transferred to end consumers in the form of lower tariffs. Furthermore, we are bringing changes in consumers behavior for sustainable consumption by providing them with the means to measure and hence control their electricity consumption. We are also building an ecosystem to reward such behavioral changes.
AV: Walk me through Go to Market approach of Muon?
DM: Pragmatism is the key when you want to disrupt the electricity space. Across the globe, it is a regulated market with a few entities having a controlling stake of the ecosystem. Our approach is to follow the regulations rather than get ahead of it. Therefore, we have worked out a carefully crafted strategy on market entry & penetration. We have just launched phase 1 in which we are providing simple to use mobile apps to our customers with the functions to forecast their electricity needs and get a ranking of available electricity offers. The purpose is to build a base which we can leverage for phase 2. In phase 2, we want to enter the Singapore market as a retailer and in collaboration with SP Services offer consumers a way to forecast and control their electricity needs, provide them with individualized electricity offers, and introduce peer to peer electricity trades among our participants. This will set the foundation for consumers to be active enablers in the market. While this happens, we also generate continuous revenue streams and plow back the profits to further enhance our technology and of course, pay back our investors.In phase 3, we will introduce REC & Carbon trades. Consumers will be able to use their mobile phones to trade these certificates and will be able to continuously monitor the performance of the projects from which they are buying REC’s As the regulation further dissolves, we will work towards removing the friction from the value chain by cutting down the middle layers and make moves towards decentralization of the entire ecosystem.
We will work on the same “lift & fit” model as we diversify into different cities & countries.