The very private man behind Cannon-Brookes’ private firm

Jeremy Kwong-Law has had an interest in the AGL Energy demerger for more than a year. And as the Atlassian billionaire’s right hand man, he has plenty of sway.

Grok Ventures, owned by Mike Cannon-Brookes and managed by Jeremy Kwong-Law, are some of Australia’s biggest clean energy investors.

When news broke that AGL Energy was considering a demerger, Jeremy Kwong-Law was quick to spot the opportunity.

“Largest owner of coal taking steps to separate itself from coal. Time‘s up. It’s economic and the right thing,” he wrote in a post on Twitter on March 30, 2021.

As the power giant slowly creaked its most significant ever restructure into shape, AGL was added to Kwong-Law’s watch list. As the chief executive of Mike Cannon-Brookes’ Grok Ventures, it is a list that carries influence.

For Grok, based in Sydney’s inner-city Surry Hills with just eight staff on board, AGL appeared an odd fit. An 180-year old electricity utility struggling to handle a rapid-fire reinvention of the industry to renewables looked a contrarian opportunity for the billionaire’s family fund.

But the 37 year-old Kwong-Law had been given licence to roam since he started working for the Atlassian founder on a part-time basis six years ago. While early-stage tech was the immediate focus, Grok quickly grew to realise tackling climate change was the bigger prize.

Starting with under $30m in 2016, the family office has now invested several billion dollars across dozens of decarbonisation deals spanning energy, transport and agriculture including green financier Brighte, the giant Sun Cable renewable export project, solar start-up SunDrive – and a stake in Elon Musk’s Tesla.

“I think most people would agree that there isn’t a bigger challenge for humanity than climate change. Then if you draw a simple pie chart you can see where emissions come from and then you work your way down,” Kwong-Law told a forum in June 2020. “However you want to draw that pie, the energy sector has the biggest emissions.”

Due to its sheer size, Kwong-Law put AGL alongside Sun Cable as one of its “lighthouse” projects. Big, ambitious investments delivering both economic returns and faster decarbonisation.

With no shortage of green developers seeking to butter up the billionaire for funds, Grok runs each opportunity through an internal ‘sweet spots’ model. Any investment must tick three boxes: be interesting, offer an opportunity and advantage.

“We want to do things that are right in the middle of those three circles. From an interest point of view if anyone has ever seen Mike‘s Twitter you’ll know that he’s super passionate about energy. So the interest box is ticked and it really does play into the climate change story,” Kwong-Law told the forum.

“As you start digging into it, it’s a fascinating, really complex and deep sector. Energy is one of the multi trillion dollar industries that it‘s really easy to get your head around just how big this opportunity is.”

Drawing on tech, which created Cannon-Brookes’ $26bn Atlassian fortune, in many cases represents Grok’s advantage.

“Where we think we can bring some advantage in thinking about energy is that there’s a real convergence of technology and what we traditionally think about energy. People forget that current modern day electricity back to Edison is a technology that we develop and people fine tune along the way,” Kwong-Law said. “Energy is getting impacted by the learning curve that we understand from technology. We’ve seen it with semiconductors and phones driven down from a cost basis and that’s the same with wind, solar and batteries where we’ve seen all those things happen. I think people miss that.”

Grok’s two takeover bids for AGL in February and March this year – majority funded by its consortium partner Brookfield but ultimately rejected by the power company’s board – was Grok’s biggest punt yet. While it was pens down after the last $8.25 a share bid was rebuffed, it was not exactly game over.

Grok re-emerged this month as a major AGL shareholder bent on destroying the company’s planned demerger. Cannon-Brookes and Kwong-Law have since been working shareholders, hosting a series of Zoom calls this week with investors and activists to sell their messages.

Along with a national advertising campaign and regular television slots to sell the “Keep It Together” campaign for AGL, the demerger play is about as high profile as it gets for the small team that keep Grok’s investment arm spinning.

But for the low-key Kwong-Law, who started his career as a Macquarie banker and also worked at Rabobank, running Grok is akin to operating a start-up: identifying a problem, finding a solution and then testing, measuring and learning.

Kwong-Law graduated from Sydney University with a law degree and co-founded a series of start-ups including financial application Vistr and investment adviser BetterWealth. His introduction to Cannon-Brookes came through his mentor Niki Scevak, who co-founded venture capital fund Blackbird Ventures and a friend of the tech mogul.

True to form, Kwong-Law’s job with Grok was eventually sealed over Twitter.

“We had a coffee, I didn’t hear from him for two weeks and then I prodded him a couple of times,” Kwong-Law recalled in onepodcast. “Then I wrote out a thesis of what I thought I could do and what would be interesting for me. Mike was overseas and we negotiated what my role would be over Twitter. And then I started.”

While relatively unknown in investment circles, Kwong-Law said he was trusted from the start. “One of the really interesting things I’ve discovered working with Mike is his willingness to take risks on people he meets and believes in. And he certainly took a chance that I could do a decent job in what I’m doing,” he said.

“At the point of joining we didn’t really know what the role was going to be about. Invest in cool start-ups and a bunch of other stuff and figure it out along the way. I think he was really looking for someone who had the scruffiness or hustle muscle to go and learn new things and get things done by themselves and that’s a culture that we still carry to this day.”

Defeating AGL’s demerger and engaging with its 148,000 small shareholders is a starkly different challenge to leading early to late stage funding rounds for start-ups.

The nimble Grok team has just over a month until a shareholder vote on June 15. While its intentions beyond that have yet to be laid out should it be successful, Kwong-Law has previously pointed to huge clean energy opportunities for Grok to size up – which may only get bigger if its demerger hustle wins the day amid speculation from AGL a third takeover could still be in the works.

“Australians are world leaders in doing a lot of things in renewable energy. We haven’t really had as much success as we should. But there’s lots of incredible things happening in Australia that we can really get behind.”