The venture capital arm of Caterpillar Inc. has expanded its portfolio with an equity investment in Albuquerque energy company BayoTech, which offers hydrogen generation systems.
The investment from Caterpillar, which manufactures construction and mining equipment, engines, turbines and locomotives, will be used to speed up BayoTech’s growth via "product development, project development and infrastructure expansion," according to the company.
BayoTech announced the investment on Wednesday. The amount of the investment was not disclosed.
"Caterpillar Venture Capital’s investment illustrates a recognition that hydrogen has great potential to help with the energy transition as Caterpillar moves forward. We are excited to be an investor in BayoTech,” Caterpillar Venture Capital Inc. vice president Michael Young said in a statement.
If its technology caught on in the marketplace, BayoTech's platform may help companies around the globe reduce their carbon footprint.
BayoTech, incorporated in 2015, offers a platform that produces hydrogen fuel by putting methane through modular reactors and then storing it. The company contends that its "gas-as-a-service" offering reduces or eliminates transportation and storage costs, leading to a lower carbon footprint compared to other hydrogen production tech.
Its technology has garnered investor interest. BayoTech previously announced that is was set to receive as much as $157 million in funding from New York private equity firm Newlight Partners with participation from existing New Mexico investors Sun Mountain Capital and Cottonwood Technology Fund. Prior to that, the company closed a $12.5 million Series B round of financing to expand its infrastructure and move closer to market.
The most recent investment comes on the heels of a couple of corporate partnerships between BayoTech and other companies. One, with Vancouver-based Loop Energy Inc., comes as part of an effort to develop marketing concepts that can pair Loop’s fuel cells and BayoTech’s hydrogen fuel generation system.
Another, with British holding company IBMS Group, is for the production of renewable hydrogen to fuel zero-emission vehicles in the United Kingdom, according to our reporting.
