Hydrogen startup C-Zero has raised $5 million of an $18 million funding round, according to an SEC filing.
The company is developing a way to strip hydrogen from methane without emitting carbon dioxide. The resulting hydrogen can be used in a range of industries today, including ammonia and petrochemical production, and potentially others in the near future, including transportation and steel production. The solid carbon waste product has the potential to be reused in everything from asphalt to lithium-ion batteries.
C-Zero raised a $34 million round valued at $124 million post-money in 2022, according to PitchBook data. The smaller target for the new round, which CEO Zach Jones told TechCrunch is a Series A extension being led by Energy Capital Ventures, suggests the company is being realistic about its prospects following its sizable haul during the pandemic. The second close should happen this fall and will include strategic partners, Jones added.
“The runway from this raise should set us up for a strong Series B next year that will get the company to being cashflow positive,” he said.
The process C-Zero employs is known as methane pyrolysis. C-Zero’s reactor heats natural gas in the presence of a proprietary catalyst to break hydrogen’s chemical bond with the central carbon atom in a methane molecule.
By using readily available natural gas as the feedstock, C-Zero hopes to produce emission-free hydrogen for less than other green hydrogen startups, which typically rely on expensive electrolyzers powered by low-cost renewable energy from wind and solar.
“Our process uses just a few kilowatt-hours of electricity per kilogram of hydrogen produced, which means we can make low carbon hydrogen anywhere customers have natural gas or LNG,” Jones said.
Tapping into existing natural gas infrastructure also makes methane pyrolysis a natural fit for petrochemical plants, which today use natural gas throughout their operations and also require large amounts of hydrogen to produce various chemicals.
The potential to sell low-cost, zero-emission hydrogen to large, established customers has caused a flurry of startup activity in the space, many of which use methane pyrolysis. A number of competing startups, including Modern Hydrogen, Molten Industries and ReCarbon, also use the process.
Update: Added comments from C-Zero CEO Zach Jones.