Frankfurt, Dusseldorf According to financial circles, the Dresden hydrogen start-up Sunfire is in negotiations with investors about a financing round that could value the company at more than one billion euros. This would make Sunfire a so-called “unicorn”, as founding companies above this valuation threshold are called.
Sunfire is talking to financiers about a sum of around 200 million euros, with an option that a substantial part could flow in the form of venture debt, people familiar with the matter said. However, volumes and modalities are in flux and decisions have not yet been made.
“With regard to our further financing, we currently have nothing to announce. Of course, as a rapidly growing company, we are in constant contact with investors,” said a company spokeswoman.
Green hydrogen will probably become a billion dollar market in the EU
The company uses an electricity-based electrolysis process to break down water into its components, oxygen and hydrogen, using electricity. If green electricity is used for the electrolysis, the end product is correspondingly green, i.e. climate-neutral. Experts currently see the greatest need for hydrogen in industry, shipping and aviation: wherever the use of a battery is more expensive or difficult.
The so-called Power-to-X technology for the production of green hydrogen is set to gain in importance in the coming years. As of now, there are only pilot projects – even if the first major collaborations have at least been announced. Experts are certain that the demand for hydrogen will soon increase sharply.
Green hydrogen is an important building block for the success of the energy transition. Electrolysis capacities in the European Union are expected to multiply from the current 1,000 megawatts to 40,000 megawatts by 2030. In order for green hydrogen to actually be produced, the massive expansion of renewable energies such as wind power and photovoltaics is required.
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Sunfire wants to complete the first factory in Germany with a capacity of 500 megawatts this year. The company then intends to increase its production capacity to one gigawatt. In order to speed up the project, Sunfire took over the surface coating specialist MTV in 2022. The pilot projects of the start-up are still on a small scale. The competitive pressure from large competitors is high.
Siemens Energy and Thyssen-Krupp are also involved in electrolysis
In order to benefit from the coming billion-euro market, companies like Siemens Energy are also massively expanding their electrolysis activities. The steel group Thyssen-Krupp has already announced that it will list its electrolysis division on the stock exchange under the name Nucera. Nel from Norway, ITM from Great Britain and McPhy from France are also planning the first electrolysis plants in the giga range.
At the end of 2021, Sunfire had raised 109 million euros from financiers such as Lightrock, Planet First Partners (PFP) and Carbon Direct Capital Management. The shareholders of Dresdener also include the French energy giant Total and the Finnish Neste Group. With the plant manufacturer SMS from Düsseldorf, the Dresden-based company has a strategic investor on board who can also help with the construction of the electrolysis plants.
In light of the energy crisis, start-ups like Sunfire are currently popular with investors. Last year, the solar service provider Enpal was the first German greentech company to be valued at more than one billion euros. This rating has now even doubled.
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