Hi Mario, thanks for this blog interview and congratulations for your special distinction at this year’s edition! Can you tell us about your participation in the EUSP?
We are thrilled to be among the best European start-ups according to the European Start-up Prize for sustainable mobility of its 2020 edition. This year GRDF awarded its special distinction to Hygen and we hope to obtain a bit more media exposure and maybe it will help us to secure the next round of funding we require.
Let’s start by better understanding what it is that you do at Hygen. Can you give us your short pitch?
Hygen is an ambitious innovative Latvian SME, dedicated to the development and commercialisation of proprietary refuelling technology for the G-Mobility market, a gaseous fuel vehicle fuelled by compressed natural gas or biomethane and hydrogen in the future. To enable refuelling natural gas-powered vehicles from the existing gas grid, a compressor/charger system is required. Existing state-of-the-art systems, based on mechanical compression technology, can be costly, require frequent servicing and could be unreliable is the system is not maintained correctly.
Hygen’s patented liquid piston compression technology, the only solution of this type in the world, allows a dramatic reduction in the number of moving parts needed for gas compression. It is therefore significantly reduces the total cost of ownership by lowering scheduled and unscheduled service and increasing reliability.
The technology can be applied for different gases such as Hydrogen or Synthetic Gas and for different application from small home appliance size up to large, high capacity mobile refuelling systems.
Given the unique technology you have developed and the huge demand for low-carbon energy, hy is it so hard for you to find investors?
It’s well known that in general there are much less investment sources in Europe than in the US. The start-up ecosystem is not very mature and varies from country to country.
To begin discussions with a VC about series A funding, you must have a fully developed product that’s on the market and selling well.
Selling well means you have annual revenue of at least 1M EUR. However, it’s very difficult for a hardware start-up to obtain revenue growth while still developing and improving its product, establishing production and a distribution channel.
The leap over the “Death Valley” is therefore almost impossible for many European hardware start-ups. Even the most fortunate ones land with broken limbs. With a success rate of 2%-3% in the EU SME funding programmes itfeels like winning the lottery. Startups therefore turn to all other funding sources like self-funding, friends and family help, Angel investors, start-up accelerators, partnering with manufacturers or customers, yet,with varying degrees of success.
Unfortunately, there are no good B2B crowdfunding platforms in the EU like StartEngine, so that is not an option we can explore.
We are currently looking to secure half a million euro for a successful market rollout. Our technology is also well suited for the upcoming necessary hydrogen infrastructure. However, in order to proceed the development of our technology towards this new solution, it will take even more support and investment.
How do you see the lack of funding impacting the innovation ecosystem?
Every start-up is first looking for the customer’s pain point in order to find a suitable cost-effective solution. Innovation increases productivity and thereby increasing the profitability of a company. Strat-ups provide much of the innovation necessary for modernisation and growth. Can you imagine what a world without start-ups would look like? What products and services would disappear?
If we think about it, innovation brought the world to its present state of affairs; it is also necessary to help us get out of this mess.
Before we conclude, let’s mention the big elephant in the room; the role of gas in the energy transition. I’m sure you have strong opinion about it…
Thanks to our current investors, Innoegergy and Spanish gas company ENAGAS, we are able to continue establishing many new demonstration pilot projects. However, it’s very difficult to move against political and hyped up trends. For whatever reason, biomethane is still not considered as a carbon neutral mobility solution, everything is focused on electromobility. and who knows if it’s right. Biomethane is a renewable energy source with very low carbon footprint; when applied as a fuel, it allows gas vehicles to run not only carbon neutral but also carbon negative if the biomethane is produced from waste. In spite of many different prizes and awards we are still struggling to build the bridge to our own sustainability. We remain confident however that once the right funding arrives, our technology can disrupt the current energy market and provide tremendous contribution to the energy transition.
Thank you very much, congrats again, and best of luck in the future!