Hydrogen has been touted as the fuel of the future to decarbonize shipping and industry, but of the 90 million tonnes currently used for everything from fertilizer to chemical manufacturing, 96% is derived directly from natural gas, oil, or coal. For example, one of the most common methods is steam reforming of methane, which essentially heats methane to release hydrogen, releasing carbon dioxide in the process.
This is hardly a climate-friendly future.
That means there's plenty of room for companies trying to make hydrogen cheaper to produce. “Today, over $100 billion is being spent on hydrogen for industrial use,” says Molly Yang, co-founder and CEO of Hgen.
Yang and co-founder Collin Ho founded Hgen three years ago after stints at Tesla and SpaceX, respectively. Their goal was to modularize an electrolyzer, a chemistry kit that can split water atoms into hydrogen and oxygen to produce green hydrogen. Electrolysis isn't entirely clean — it still requires electricity, which is currently generated from a mix of renewables and fossil fuels — but as power grids get cleaner, hydrogen production through electrolysis will become cleaner, too.
That vision led the company to raise a $2 million seed round led by Founders Fund in 2022 and helped it be selected for that year's Breakthrough Energy Fellows cohort. Now, Hgen is back with another $5 million funding round from Seven Seven Six, with participation from Fontinalis Partners and Founders Fund, the company told TechCrunch exclusively.
Part of Hgen's initial pitch was that the company currently has all the electrolyzer technology it needs, but it hasn't been fully optimized. “We're not a materials R&D company,” Yang told TechCrunch. Instead, the team focused on optimizing the entire widget, from the electrolyzer's electrodes to the tangle of pipes and pumps that support them.
Hgen uses alkaline electrolyzers, an old, proven technology that sacrifices some of the efficiency gains of the new approach for lower costs. But Yang claimed Hgen has found a way to miniaturize the electrolyzer by a factor of 20 and reduce material and manufacturing costs. “Even for the first build, we're reducing costs significantly,” Yang said.
In an electrolyzer, the magic happens at the interface between the electrodes and the liquid. The electrodes carry electricity to the liquid, driving a chemical reaction that breaks the bonds between hydrogen and oxygen. As that happens, bubbles of hydrogen gas on one side of the electrolyzer and oxygen gas on the other form on the electrodes, eventually dripping down to the surface.
But those bubbles tend to linger for a long time, “preventing the electrode from reacting and producing new hydrogen,” Yang says. So Hgen tweaked its electrode design to allow the hydrogen and oxygen bubbles to escape more quickly, meaning Hgen's electrolyzer stacks can be smaller and still produce the same amount of hydrogen. Smaller stacks mean they use less material and take up less space, further reducing costs. “Our cell design essentially enables this virtuous cycle,” Yang says.
Yang said Hgen will package everything in a 40-foot shipping container that can be delivered to the site and hooked up with minimal effort. “All that's needed is water and electricity inputs,” she said.
The startup is initially targeting companies that currently have hydrogen delivered liquefied, which Yang said can cost more than $10 per kilogram. “Being able to avoid liquefaction and truck delivery altogether makes it more attractive cost-wise,” he said. “It also makes for a more stable and secure source of supply.”