Investments in hydrogen startups may soar with the creation of Hydrogen Hubs

This week’s announcement of seven regional hydrogen hubs and $7 billion in federal money significantly increases spending in a technology that has seen modest private sector investment in hydrogen-related companies. Since 2013, investors—including angel, seed, and early- and later-stage VCs—have invested across $7,849.59 million across 366 deals with 340 companies related to the hydrogen industry sector, according to an SSTI analysis of Pitchbook data. Figure 1 below shows deal counts and capital invested by investment stage, 2000-2023 Q3.

Figure 1: Deal counts and capital invested, by investment stage, 2000-2023 Q3

So far this year, investors have made 46 deals with hydrogen companies. Also this year, as reported by PitchBook, the U.S. saw its first hydrogen unicorn: Electric Hydrogen became the first green hydrogen electrolyzer startup to reach unicorn status, closing a $380 million Series C with backing from investors including BP, United Airlines, and Microsoft.

The number of companies receiving investments has gradually increased since 2000. The number of companies nationwide was in the single digits until 2012, when 15 startups received money from investors. By 2022, that number grew to 58, and 2023 is on track, with 44 companies receiving funding from private investors.

Since 2018, the states participating in Hydrogen Hubs have seen a significant number of investment deals. California, home to the California Hydrogen Hub, tops the list with 93 deals. States where the other six hubs are operating have averaged 11.5 deals each in the past five years.