Nov 4, 2014
The cleantech start-up Electrochaea has successfully closed a Series A venture round and is receiving several million Euros for further developing its power-to-gas technology and for financing the future growth of the company. The consortium consists of experienced investors from Germany, Switzerland, and the United states and includes Munich Venture Partners (Munich), b-to-v (St. Gallen/Berlin), Caliza Holding (Netstal), Focus First (St. Louis, MO/USA), KfW (Frankfurt/Bonn/Berlin), and Sirius Venture Partners (Wiesbaden/Düsseldorf).
Power-to-gas is an innovative grid-scale energy storage technology capable of storing large amounts of renewable energy from wind and solar. Electrochaea is developing a system for converting renewable energy first to hydrogen and then to methane, the principal component of natural gas, for direct injection into the existing natural gas grid. Once in the grid, the gas can be stored for an indefinite period of time and used for power production, in heating applications, or in transportation. It can also be transported geographically to demand centers via existing gas pipelines in order to alleviate power grid congestion. Electrochaea’s core expertise is in the development of a system that uses a novel biocatalytic process for the conversion of hydrogen and carbon dioxide to methane. The biocatalyst has many technical advantages that translate to lower capital and operating costs compared to conventional systems.
Dr. Martin Kröner, Managing Partner at Munich Venture Partners: “Power-to-gas is the only technology that can both store energy and distribute the energy carrier without further congesting the power grid. Electrochaea’s biological methanation technology outcompetes conventional methods in terms of economics and dynamic operation. The management team’s technical expertise and consistent focus on market needs convinced us of the investment opportunity presented by Electrochaea.”
Christian Schütz, Partner at b-to-v, adds: “We are convinced that power-to-gas technologies will play an increasingly important role in storing excess electricity produced in a decentralized energy system. We see Electrochaea as the clear leader within the universe of biological methanation technologies. The team is highly market-driven, and their ability to bring together experienced investors to form a consortium is testament to their business acumen.”
The funds will be used to grow the international team at the new headquarters in Munich, to pursue intellectual property, and to provide equity capital to the technology demonstration project BioCat in Copenhagen (Denmark). The goal of the BioCat Project is to demonstrate Electrochaea’s technology at commercial scale (for more information: www.biocat-project.com). The project consortium includes Audi (Germany), Hydrogenics (Belgium), HMN Gashandel, NEAS Energy, BIOFOS and Insero Business Services (all Denmark).
Mich Hein, CEO of Electrochaea, remarks: “Our goal is to enter the market with a commercial product by 2016. Closing our Series A venture round has taken us one step closer to that goal. We are honored by the trust and confidence our investors place in us and look forward to working with the board on building a successful and lasting company.”
Johannes Peschko, co-founder of Sirious EcoTech Fund Düsseldorf, adds: “Electrochaea’s successful history, its professional management, and technological leadership position has convinced us to join the investor consortium. With this funding round and the projects currently in the pipeline, the company is well positioned to strengthen its leadership position in the power-to-gas market.” The investment firm Focus First (managed by Nidus Partners), which founded Electrochaea in 2010 and has led it through its first growth stage, is also participating in the round and continues to be involved in the company’s stewardship.
The consortium is completed by KfW, a German development bank. The bank’s ERP Start-Up Fund has a broad investment mandate covering different industries, including biotech and cleantech. Investing in cleantech companies from the energy sector is becoming increasingly important for the Fund. Electrochaea therefore fits well into KfW’s current investment strategy.
Electrochaea was founded in 2010 as a spin-off from the University of Chicago. As part of the Series A, the company has relocated its headquarters to Munich (Germany) to be closer to the European key markets for power-to-gas and to more closely collaborate with its strategic partners in Germany, Denmark, Switzerland and other European countries.