Green hydrogen startup Versogen raises $14.5M
NEWARK – Versogen, a startup spun out of the work of a University of Delaware professor that seeks to build scalable “green” hydrogen production, recently landed its first round of investor funding, raising $14.5 million.
Now headquartered at the Delaware Innovation Space on the DuPont Experimental Station, Versogen has been developing a commercial version of its electrolyzer, which separates hydrogen and oxygen from water, and doesn’t produce a harmful carbon dioxide byproduct. The company aims to decarbonize heavy, hard-to-abate industries with its technology by powering the electrolysis with renewable energy from wind or solar farms.
Yushan Yan, the Henry B. du Pont chair in chemical and biomolecular engineering at UD, founded Versogen, originally known as W7Energy, in 2018 after working for more than 20 years on the development of fuel cell technology.
As its work has progressed, the firm began working a year ago on its Series A fundraising round to back the development of its prototype electrolyzer stacks and expand the production of their patented anion exchange membranes, Yan said.
It landed $14.5 million, led by Boston-based hydrogen power company HyAxiom, a subsidiary of Korean conglomerate Doosan Corp. Other investors include Wilmington-based chemical company Chemours; TechEnergy Ventures, a venture capital arm of Argentine conglomerate Technit; Wenstone H2Tech LLC, a newly formed company; TOP Ventures America LLC, a Baltimore-based water equipment manufacturer; an investment arm of Thai Oil Public Company Limited, the largest oil producer in Thailand; DSC Investment, a Korean investment fund; and CN Innovations Investments Limited, the investment arm of a Hong Kong tech company.
Last year, Yan said that Versogen aimed to raise $10 million in its Series A round, but it was able to oversubscribe the round by nearly 50%.
“We had very strong interest from many investors. In the end, we had to make some room for some of them to come in, which is good,” he said.
For Delaware, the inclusion of Chemours, which operates its Discovery Hub on the UD STAR Campus, was particularly notable, as the public chemical company seeks to invest in next-generation technologies being developed nearby.
“Chemours is passionate about the potential of the hydrogen economy and our role in it, and we’re constantly looking for opportunities to accelerate innovation and new technologies for clean energy,” said Denise Dignam, president of advanced performance materials for Chemours, in a statement about the investment. “We’re excited to participate in Versogen to help power their continued scale-up and to have the opportunity to collaborate with a start-up in our backyard to understand better the synergies between AEM technology and our Nafion ion exchange membranes in green hydrogen production.”
Versogen will use the majority of the investment proceeds to advance its prototypes of its electrolyzer unit, but some will also scale up its production of its polymer membranes, the most integral part of the larger equipment, Yan said. In order to do that, Yan said they expect to grow the company from 17 to 30 employees.
The company is aiming to complete its electrolyzer stack unit prototype in 2024, when it would then test its efficiency, and if successful, seek to raise a Series B round to begin manufacturing of additional units.
To date, Versogen’s technology has landed a $3.4 million U.S. Department of Energy research grant, a $100,000 state EDGE grant, and $1 million in private investment, along with other smaller grants. They also have secured a half dozen patents related to the technology and worked on building their capacity to manufacture their novel membrane at their Delaware Innovation Space home.