German startup Sunfire has secured €500m in Series E financing — a combination of equity, debt and grants — to scale up its green hydrogen production technology.
The Dresden-based company is one of the best-capitalised European players working on hydrogen production.
The company, which was founded in 2010, secured €215m in equity from LGT, Singaporean sovereign wealth fund GIC, Ahren Innovation Capital and Carbon Equity. Sunfire also secured €200m in grants and €100m in debt from the European Investment Bank (EIB).
Sunfire makes electrolysers — hardware that splits water into hydrogen and oxygen — which are powered by renewable energy. At present, the majority of hydrogen manufacturing relies on fossil fuels.
"The EU is rightly determined to future-proof its industry,” says founder and CEO Nils Aldag. “The EIB credit demonstrates that Sunfire can successfully access the venture debt market.”
Investors already in Sunfire’s cap table include Lightrock, Planet First Partners and Carbon Direct Capital.
Sunfire is supplying electrolysers to Finland’s first green hydrogen plant, set to begin commercial operations this year.
Europe’s hydrogen economy
Hydrogen fuel, which only produces water when burned, can be used to replace fossil fuels in emissions-intensive processes like steel production. Swedish startup H2 Green Steel, for example, relies on it to replace coking coal to manufacture steel.
Hydrogen takes a lot of energy to produce so, for it to make sense environmentally, it has to be produced using renewable energy — which is where tech like Sunfire’s electrolysers comes in.
Interest from policymakers is on the rise. In February, the European Union approved $7.4bn in state aid for infrastructure projects to boost the supply of renewable hydrogen. It will support the deployment of large-scale electrolysers and pipelines to transport hydrogen.
