It’s rare to see a positive climate story hit the headlines, let alone one with an Irish angle, but last week Dubliner Paul Barrett PhD made Australian history by leading his company, Hysata, in the largest cleantech Series B in the country, raising AUD$172 million (€105 million). 

The company, based south of Sydney in Wollongong, is developing high-efficiency electrolysers that aim to produce green hydrogen. Hysata’s unique selling point is rooted in its technology, which combines engineering and science in a unique capillary-fed alkaline electrolyser, using less energy to convert water to hydrogen. 

This is the third funding round for the company founded in 2021. 

Templewater and BP Ventures led the landmark investment round, with backing from Hysata’s existing strategic and financial investors IP Group Australia, Kiko Ventures (IP Group PLC’s cleantech platform), Virescent Ventures on behalf of Clean Energy Finance Corporation, Hostplus, Vestas Ventures and BlueScopeX.

The company also welcomed new strategic and financial investors Posco Holdings, Posco E&C, IMM Investment Hong Kong, Shinhan Financial Group, Twin Towers Ventures, Oman Investment Authority’s VC arm IDO and TelstraSuper.

“The ambition is saving the planet and carving out a really good economic opportunity at the same time,” says Barrett. “We’re balancing purpose and profit. It’s pretty motivating.”

Raised in Killiney, Co Dublin, Barrett received his PhD in chemical engineering at UCD before spending the first decade of his career in the US working in chemical, pharmaceutical and petrochemical manufacturing environments in largely techno-commercial roles. He moved to Australia 15 years ago. 

Before joining Hysata, Barrett was a partner at IP Group, a venture capital firm focused on cleantech. Tasked with scouring the globe with an investment thesis around green hydrogen, he was looking for a technology that had “a real step change in performance”, only to discover Hysata’s technology at a university 10 kilometres from his house. 

Still on the investor side at that time, Barrett led the company’s seed round of AUD$5 million in 2021, which helped establish its proof of concept, all amidst the backdrop of Covid-19. In 2022, Hysata raised in a Series A round, which provided the business with a further AUD$42.5 million. 

“One of the investor requests was that I join full-time as the CEO,” said Barrett. “So I jumped in two years ago and it’s been awesome, building the team and scaling. 

“There’s probably three big things we’ve done super well. Bringing in top talent early. Top global tech talent tends to execute really well and can mentor new staff that come on, so we built a talented bench from time zero. We also have really big commercial traction. When you’re in Australia there’s a bit of a tyranny of distance and you’ve got to think global from day one. The company was born in peak Covid, so we weren’t able to travel and we really had to hustle to get access to global customers. We hired people, ‘boots on the ground’, in the US and in Europe.

“Because they’re pretty big, complex, B2B strategic sales, it’s a long sales cycle. So you’ve got to get in early and get working with the right people. And then the tech is really differentiated. Our technology stands head-and-shoulders above competitive technology in terms of performance. We have really high energy efficiency.

“We have an intrinsically low capex. So those two factors translate to a levelised cost of hydrogen or really low cost of green hydrogen, which gives us the commercial traction. So we’ve got this giant leap in performance over incumbent electrolysers. And that translates to huge value creation for our customers. That triangle — the team, the tech, and the customers all interact.”

A strong start

Barrett credits his upbringing, exposure to hard work and entrepreneurial DNA for his business drive. “I think I learned the art of the hustle from my dad who was an entrepreneur in his own right in the 1970s and 1980s in Ireland, which was very different from the 2020s.”

His father Brendan Barrett was founder and director of Dublin’s first free newspaper, Southside, a former director of the Sunday Tribune and went on to run his own sales training and consultancy business, coaching business leaders. “He was an entrepreneur in his own right, a small business owner, and that’s where you get the art of the hustle, right? Nothing like seeing a family member own a business.”

Barrett is putting all that early training into practice and wasting no time in leading his team into the next phase of development. 

“If you look at the Series B, we got a pretty impressive cap table in this round. We’ve combined global financial heavyweights with global industrial heavyweights and that gives us the financial savviness, coupled with our strategic customers. Those strategics bring big balance sheets and huge engineering capability. And they’re customers. We’ve got capacity reservation agreements with these strategic, so that’s a really powerful mix to have on your cap table,” Barrett said. 

Hysata’s electrolyser manufacturing facility in Port Kembla.

Growing the team and bringing in the materials and equipment needed to scale is top of the agenda. “Our building is an iconic beachfront building. It’s like being in Brittas Bay but having a big factory right on the beach, and it has all those things that are stereotypically Australian — you can go surfing before work, people go for a run on the beach, it’s a really great location with great curb appeal,” he said.

“That gives us the space to scale under one roof. It’s pretty big, it’s 8,500 square metres, so a lot of power is coming into that building. And we’re actually installing some additional manufacturing equipment today, so really getting started on that scale-up.”

The European picture

The potential for renewables in Ireland, Barrett believes, lies in offshore wind and low-cost electrons. “With low-cost electrons comes the ability to not only power the grid, but use those electrons to make value out of products,” he said.

“Australia’s position can give context to the Irish opportunity: Australia is a massive landmass. There’s a lot of land that’s not arable, not farmable. And there’s a lot of coastal desert, so the topsoil is very thin, low population density, really inexpensive, right by the ocean and you’ve got world-class assets. So when you want to run an electrolyser off renewables, if you just do it off solar, it’s off 16 hours a day because the sun’s not up. That’s capacity factor, and that really plays on your economics.”

He added: “So you want the capacity factor — the time your asset or electrolyser’s operating — to be as high as possible and to do that with renewables, you need firm renewables like hydro. Hydroelectricity can be on all the time. Or you need a blend of world-class solar and wind assets where you can get a capacity factor of around 60-70 per cent in certain jurisdictions. That means your asset can be on full blast 60-70 per cent of the time, which lowers the cost, and there’s a huge opportunity for creating value-add green products for export. 

“If you look at what Australia does today, we export a lot of coal and that coal will disappear over the next decade or so. Global demand will dry up as people do their decarbonisation agendas. We also export a lot of iron ore, and Australian iron ore has a pretty big global emissions impact because we have so much of it. That’s those scope-three emissions, emissions that are embedded in those raw materials that go somewhere else. So that iron ore might go to China, Korea or Japan.

“The emissions might be admitted there, but it’s really Australia’s responsibility. So Australia will be looking to make a lot of green iron, where we can take out about 90 per cent in emissions domestically, and then export green iron instead of iron ore, which probably doubles the value of that iron ore and creates huge employment in Australia. Opportunities like that are in Ireland and certainly big opportunities in offshore wind.”

Hysata’s chief commercial officer is based in Copenhagen, and the Scandinavian region is already world-leading in renewables. “Denmark has a tonne of offshore and onshore wind, and it’s got a deeply decarbonised grid. When you walk around Denmark, you don’t hear any cars because they’re all electric and similarly with Sweden and Norway, so we’re getting a lot of traction in Scandinavia, Germany, the UK, and I’m looking forward to hopefully fostering some big opportunities in Ireland as well,” Barrett said.

“We’ve got to electrify everything and be more efficient with the electricity we use. But when we’ve done all that you leave behind about 20 per cent of the world’s emissions in the so-called hard-to-abate sectors. These are sectors where you can’t use electrons or electricity to decarbonise them, which is where green hydrogen fits in. Electrolysers are the machines that take power in or renewable power in and split water into hydrogen and oxygen. Our customers buy those machines from us and power those machines with renewables and they’ve got green hydrogen. They will use that green hydrogen to decarbonise their operation.”

Path to net zero 2050

Asked if, like the rest of us, climate change keeps him up at night, Barrett doesn’t proffer a one-word answer. 

“I think there’s hope, we just have to keep our foot on the accelerator. You know, humans have been adaptable since time zero. That’s what makes us a special species. But now we’ve got science staring us in the face, we can’t do business as usual. Everybody has a moral responsibility to be more efficient with the energy they use and decarbonise the energy they use,” he said.

“For the consumer that’s trying to electrify everything, move away from natural gas and coal and use electrons and hopefully the Irish grid with offshore wind can be deeply decarbonised, and deep decarbonisation for industry that I’ve been talking about with the hydrogen mission we’re on. So there’s hope, but it’s a mammoth task and needs absolute focus and determination to make it happen. There could be a few naysayers in the argument, but there’s just a huge commercial opportunity, in addition to saving the planet, so it’s kind of like a win-win.”

For now, though Barrett’s focus is back with his team. 

“We solved access to capital, access to talent, and the commercial traction we have is absolutely off the charts. I’ve got multi-billion dollars’ worth of capacity reservation agreements and growing all the time, so it really comes down to technology execution. Then it comes back to the team and absolute laser focus. Sometimes when you hit a major milestone, you can put your feet up and become complacent. Complacency is a disease that doesn’t happen at Hysata. We’re laser-focused on execution.

“Culture isn’t a buzzword for us. It’s in the DNA of what we do. Teamwork is what brings the business to life. I’m a rugby fan, and it takes all shapes and sizes to get a rugby ball over the line. It’s the same in business, you need all shapes and sizes, you need an inclusive culture, constructive feedback and really collaborative problem-solving so everyone’s voice can be heard and you’ve got to over-execute and deliver. 

“We have a lot of engineers who wouldn’t typically have EQ or great empathy, but that can be trained and that helps build a collaborative community. While it sounds a bit left field, the result is absolutely a higher performing team, a team that’s really engaged and gives their all every day. 

“It’s profoundly beautiful, building a team that works so well together. Like the Irish rugby team — when you get it right, it’s profoundly beautiful.”