PitchBook data reveals that the amount of private financing flowing into startups and established businesses involved in the expanding hydrogen economy has never been higher.
More money than ever before will be invested by VC and PE firms in worldwide businesses that make, move, or use hydrogen in 2022. Additionally, this year saw a record-breaking number of deals on the venture side.
PE firms invested $3.1 billion in hydrogen-related businesses across 37 deals through the majority of 2022, while venture capitalists invested $2.6 billion in 192 startups. Since 2014, the annual PE transaction count has quadrupled while the number of VC hydrogen deals has more than tripled.
As a result of governmental and corporate promises in Europe, Asia, and North America to develop hydrogen infrastructure and promote its usage to reduce emissions from fossil fuels, which contribute to global warming, hydrogen has taken off in the private markets.
According to PitchBook data, Oregon-based Intersect Power raised $750 million in growth equity this year from TPG, Trilantic North America, Climate Adaptive Infrastructure, and other investors. This growth equity raise made Intersect Power the largest hydrogen PE deal of 2022 and the largest growth equity raise for a hydrogen-focused company ever. Intersect creates and manages assets for utility-scale battery storage, solar power generation, and has intentions to grow into the production of green hydrogen.
Over the summer, TPG and Decarbonization Partners led a $300 million Series D growth equity round for VC-backed Monolith, which claims to have cracked the code on economically separating natural gas into pure streams of hydrogen and carbon. The latter company, which Temasek Holdings and BlackRock jointly established last year, intends to invest in businesses that seek to shift the economy toward more sustainable energy sources.
More than $400 million was invested in the manufacturing of zero-emission hydrogen in some of the largest VC rounds this year, for the companies Sunfire in Germany and Electric Hydrogen in the Bay Area.