TABLE 2.4 Capital Raised by Private Sector Entrepreneurial Companies for Hydrogen Technologies

Area of Company Focus

Number of Companies in Database

Capital Raised 2002-2007 ($)

Fuel cells (of all types)

38

468,107,388

United States

21

327,595,800

Europe

13

91,212,248

Canada

4

9,299,340

Fuel cell components (e.g., membranes)

8

127,490,300

United States

2

59,900,000

Europe

6

67,590,300

Hydrogen production (e.g., electrolyzers, reformers)

12

64,688,900

United States

6

47,255,000

Europe

2

3,800,000

Canada

4

13,633,900

Hydrogen storage (e.g., tank, hydrides)

3

6,710,309

United States

2

808,000

Europe

1

5,902,309

Hydrogen infrastructure (e.g., compressors, dispensers)

1

2,055,000

Canada

1

2,055,000

Other (e.g., integrators, applications providers, vehicle retrofit)

6

135,786,000

United States

3

93,020,000

Europe

2

11,000,000

Canada

1

31,766,000

Total

68

804,837,897

SOURCE: CleanTech Network, personal communication, July 16, 2007.

Two of these companies are U.S.-based, one is Australian, and three are in the United Kingdom.

It is much more difficult to obtain data on investments in privately owned companies that pursue hydrogen technology because they do not make balance sheet data available publicly. Data received from the U.S. Fuel Cell Council and from two venture funds that were willing to share their deal logs yield some approximate estimates: between 104 and 160 private entrepreneurial companies in the United States, Canada, and Western Europe are engaged in activities related to hydrogen and fuel cells. Almost no reliable data are available about private companies in the rest of the world that are pursuing hydrogen developments. Probably the best source of data on such companies is the Cleantech Network; it has graciously provided aggregated data that show capital invested in more than 68 private fuel cell and/or hydrogen companies to be almost $805 million since 2002 (Table 2.4), an astonishingly high number in view of the very difficult investment climate in the early part of the decade.

The 68 companies that reported financial investment data to the Cleantech Network were fewer than half of the 147 companies that the Network has identified in the hydrogen fuel cell space, so it is possible that the actual amount invested is more than double the total shown in Table 2.4.

Among the private and small public companies engaged in work on hydrogen may be a few that will be the future Ciscos and Microsofts of the field, when and if the transition to hydrogen occurs. The challenge for investors is, of course, to anticipate which ones will achieve long-term success. Those who have studied the emergence of new technologies, such as radio and automobiles, point out that initially there were hundreds of new entrants but, in the end, only a few of those companies survived and thrived.

As in all fields, entrepreneurs interested in hydrogen as a business opportunity will respond vigorously to clear signals about market opportunity. Deregulation of the telecommunications industry, for example, created a flood of new entrants, pursuing opportunities that had previously been denied to all but AT&T. Virtually all hydrogen-related companies saw increases in their share prices when the FreedomCAR program was announced, demonstrating a vigorous response to government signals. During 1998-2001, signals from the auto industry about imminent introduction of hydrogen-fueled vehicles led to a surge in private and public capital flowing into entrepreneurial companies that offered technologies able to serve this anticipated new market.

Since early 2000, however, the market has come to realize that the technology development timetables in hydrogen are longer than many had thought and the costs to achieve acceptable price and performance are greater than originally anticipated. As a result, in 2007 there was little investor enthusiasm for investment in hydrogen (except for the Russian consortium said to be investing in Plug Power). As a result, there are few new public offerings (and some that came to market had to be withdrawn) and little interest in supporting new private companies in the space. Even compa-



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