This week, Hydro Wind Energy, the San Francisco/London/Dubai-headquartered, Techstars-backed energy startup, announced that it will receive an investment of EUR 50 million (about $57 million) from the $3.4 billion global private equity group Global Emerging Markets (GEM). The company plans to put the capital toward its ongoing efforts to disrupt the global Energy and Desalination Markets.
Under the agreement, GEM will provide Hydro Wind Energy with a share subscription facility for a 36-month term following the public listing of the company’s shares on a European or American stock exchange. Hydro Wind Energy will control the timing and maximum amount of drawdown under the facility and has no minimum drawdown obligation. Concurrent at the public listing of Hydro Wind Energy’s shares, GEM will receive warrants to purchase shares in the company.
Hydro Wind Energy is positioning its disruptive technology to solve three of the century’s most pressing challenges: low-cost clean electricity, grid scale energy storage, and water scarcity. All three solutions ultimately harness offshore wind using vertical axis wind rotors and offshore based kite systems. They have also developed and commercialized the world’s only low-cost handheld seawater desalination device for humanitarian purposes and the marine sector.
In 2020 the company was selected as one of the top 100 startups shaping the Fourth Industrial Revolution by the World Economic Forum.
The capital raised from GEM will go towards developing technologies for power generation (OceanHydro Wind) and water desalination (SubSea RO Wind), as well as scaling QuenchSea (portable seawater desalination device) globally.
Both OceanHydro Wind and SubSea RO Wind are powered by high altitude, ocean-based kites and vertical axis wind rotors rather than turbines. The technology ultimately uses wind for mechanical lift rather than converting directly to electricity. This, according to the company, reduces the cost of desalination by 90 percent compared to all other technologies. It also enables a far more efficient method of power generation, storage and dispatch, compared to conventional wind turbines which are unable to either store or dispatch on-demand electricity. The technology also opens up access to offshore wind in deep waters where 80 percent of the world’s wind resource exists, and provides ancillary services for grid resiliency.
The company is currently in the midst of project building and testing of a subscale system of both technologies off the coast of Fujairah in the United Arab Emirates with several offshore engineering firms and strategic partners. A project that will build the foundations for building a larger scale demonstrator. The company plans to have both scale prototypes completed by the end of 2022, with full scale commercialization planned for 2023. Annual revenues are forecast to reach at least $300 million by 2025.
“Having GEM onboard is a huge foundational step in realizing our vision to play a major role in the global transition,” Hydro Wind Energy Co-Founder and CEO Lee King said. “Our technology is ultimately about structural design, systems integration and automation rather than making quantum leaps in technology development. It’s in essence a simple technology with immense potential for impact in the shortest possible time. What we are doing is combining existing and proven technologies in a novel way to solve some very big challenges while simultaneously reducing costs.
“The financial commitment from GEM and the parallel public listing will provide us with the ability to accelerate scale testing and commercialization,” he added.
GEM manages a diverse set of investment vehicles, including Small-Mid Cap Management Buyouts, Private Investments in Public Equities (PIPEs) and select venture investments, all focused on emerging markets. To date, the firm has completed 400 transactions in 70 countries.