5 Seattle Hydrogen Startups Poised to Revolutionize Aviation

5 Seattle Hydrogen Startups Poised to Revolutionize Aviation

By Rishab Balakrishnan | Connect on LinkedIn

August 30th, 2024 | 4 min 18 sec read

*Includes startups with significant investment and/or operations in Seattle.

1. ZeroAvia

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Funding and Industry Backers:

ZeroAvia has raised a total of $352.4 million, including a significant Series C round of $116 million led by the UK Infrastructure Bank, with Airbus, Barclays Sustainable Impact Capital, and NEOM Investment Fund as key investors. Other backers include Breakthrough Energy Ventures, Amazon Climate Pledge Fund, and Shell Ventures, reflecting robust investor confidence in ZeroAvia's hydrogen-electric propulsion technology (ZeroAvia, n.d.).

Future Role and Cost Parity:

ZeroAvia is at the forefront of developing hydrogen-electric propulsion systems that retrofit existing aircraft, providing a critical pathway for airlines to reduce emissions without the need for extensive fleet replacement or infrastructure modification. This approach is particularly appealing to airlines looking to meet environmental goals cost-effectively. By targeting regional aircraft first—where shorter ranges and smaller aircraft sizes make hydrogen more feasible—ZeroAvia positions itself to capture early market share in a segment poised for regulatory and consumer-driven change. With major airlines like British Airways and American Airlines already showing interest, ZeroAvia's technology platform is well-positioned to scale, potentially opening up a multi-billion dollar market as airlines globally seek to meet sustainability targets. The retrofit model could drive a significant portion of the estimated $30 billion hydrogen aviation market by 2030 (ZeroAvia, n.d.).

2. Twelve

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Funding and Industry Backers:

Twelve has raised $130 million in Series B funding, led by DCVC, Pulse Fund, and others, demonstrating significant investor interest in sustainable aviation technologies. Additionally, the company recently secured $45 million in debt financing in August, likely to support its continued growth. However, this move could suggest a shift in management’s approach to funding, potentially affecting future equity offerings and the company's overall exit strategy (Twelve, n.d.).

Future Role and Market Integration:

Twelve's innovative approach to producing synthetic jet fuel offers airlines a drop-in solution that enables substantial carbon emission reductions without the need for new engines or infrastructure. This makes Twelve's technology particularly attractive as a near-term solution, bridging the gap while the industry transitions to more sustainable options like hydrogen. Given the current global focus on reducing aviation emissions, Twelve's synthetic fuel has the potential to capture a significant share of the sustainable aviation fuel (SAF) market, which is projected to exceed $15 billion by 2028. The versatility of Twelve's technology platform also provides a clear path for scaling into other sectors, such as marine and heavy transport, multiplying revenue opportunities beyond aviation and enhancing the company's long-term growth prospects (Twelve, n.d.).

3. Modern Hydrogen

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Funding and Industry Backers:

Modern Hydrogen has raised $30 million and focuses on decentralized hydrogen production through pyrolysis technology. This method allows for on-site production of hydrogen, reducing the costs associated with transportation and storage (Modern Hydrogen, n.d.).

Future Role and Cost Impact:

Modern Hydrogen's decentralized hydrogen production model offers a compelling solution for smaller and remote airports that may lack the infrastructure needed for centralized hydrogen fuel distribution. By producing hydrogen on-site through advanced pyrolysis technology, Modern Hydrogen addresses one of the critical barriers to hydrogen adoption in aviation: the high costs associated with fuel transportation and storage. This approach not only reduces costs but also ensures a more reliable supply chain, particularly valuable in geographically isolated areas. If Modern Hydrogen can scale its technology effectively, it could access a substantial portion of the hydrogen supply chain market, which is expected to be worth over $40 billion by 2040. By focusing on decentralized production, Modern Hydrogen has the potential to revolutionize hydrogen availability and affordability, especially in underserved markets (Modern Hydrogen, n.d.).

4. MagniX

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Funding, Industry Backers, and Intellectual Property:

MagniX is arguably the most critical piece of the future of sustainable aviation innovation in Seattle. Its investments (including a ~$75M NASA grant) and partnerships (especially with Harbour Air) have allowed it to independently develop electric propulsion systems (and their supply chains). This independence, in our research opinion, has enabled it to explore hydrogen so openly. The company is currently partnered with Eviation's Alice program, using its magni650 Electric Propulsion Units (EPUs) to power the all-electric aircraft, highlighting its strong intellectual property position in the electric aviation market (MagniX, n.d.).

Future Role and Cost Benefits:

MagniX is strategically positioned to lead the development of hybrid hydrogen-electric propulsion systems for short-haul flights. By leveraging its existing electric propulsion technology and partnerships with key players like Eviation and NASA, MagniX can integrate hydrogen solutions more seamlessly into its portfolio. The ability to offer both pure electric and hybrid systems allows MagniX to cater to varying airline needs, optimizing energy efficiency and reducing overall operational costs. Given the growing regulatory pressures and market demand for greener short-haul solutions, MagniX's adaptable technology could serve a pivotal role in the transformation of regional aviation, potentially capturing a significant portion of the $50 billion regional aircraft market over the next decade. Their strong intellectual property and strategic collaborations further enhance their market standing, offering substantial growth opportunities (MagniX, n.d.).

5. First Mode

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Funding and Industry Backers:

First Mode has raised over $200 million from mining giant Anglo American (valuing the firm at nearly $1.5 billion), focusing on heavy-duty hydrogen fuel cell applications (ex. trucks). Given the relative security of their revenue pipeline for the next several years and the binding-nature of their contract limiting growth in the mining sector, their engineering capabilities could eventually be extended to airport ground equipment, such as jet bridges, fuel tankers, and baggage tractors (First Mode, n.d.).

Competing with Battery Technology:

First Mode's expertise in hydrogen fuel cell technology, initially developed for heavy-duty applications like mining trucks, positions it uniquely to expand into the aviation ground support market. The transition to hydrogen-powered ground equipment, such as jet bridges, fuel tankers, and baggage tractors, provides airports with a practical pathway to reduce emissions and improve operational efficiency through longer operational times and quicker refueling compared to battery technology. As airports globally seek to decarbonize operations, First Mode could carve out a substantial niche in this market, which is forecasted to grow rapidly in response to new sustainability regulations and green initiatives. This expansion not only opens new revenue streams but also solidifies First Mode's role as a leader in hydrogen technology applications across various high-impact sectors (First Mode, n.d.).

References

• First Mode. (n.d.). Heavy-Duty Hydrogen Fuel Cell Applications. Link
• MagniX. (n.d.). Electric Propulsion Systems and Hydrogen Applications. Link
• Modern Hydrogen. (n.d.). Decentralized Hydrogen Production Technology. Link
• Twelve. (n.d.). Synthetic Jet Fuel Production for Sustainable Aviation. Link
• ZeroAvia. (n.d.). Hydrogen-Electric Propulsion Systems for Aviation. Link