Li Ka-shing Gates teamed up with a Middle East consortium to invest in a hydrogen-electric aircraft

The richest man in the world, "with a head and a face", invested in a hydrogen-electric aircraft.

Recently, the US hydrogen-powered aircraft company ZeroAvia obtained the largest financing in history, the specific amount was not disclosed, but from the previous financing scale, the current round of financing scale is at least more than 500 million yuan.

The round was co-led by Airbus, Barclays Sustainable Impact Capital and NEOM, a Middle Eastern consortium. Old shareholders continue to raise funds, including: Breakthrough Energy Ventures (BEV), Li Ka-shing's Horizons Ventures, Amazon Climate Pledge Fund, Alaska Airlines, Ecosystem Integrity Fund, Summa Equity, AP Ventures。

There is rarely a single startup that can gather so many billionaires, investment institutions and aviation groups around the world. Why is ZeroAvia so popular?

Zero-emission hydrogen-electric aircraft

Founded in 2017, ZeroAvia is a hydrogen-electric aviation solutions company located at its Kemble base in the scenic Cotswolds, England, with a research and development center in the United States.

In response to the growing climate change impacts of the aviation industry, ZeroAvia is committed to transforming the highly polluting aviation industry into a clean industry, with hydrogen electric propulsion systems as the most environmentally friendly and economically attractive solution.

As in the automotive industry, there are currently many companies in the aircraft sector that are beginning to transition to low-carbon environmental protection, and many start-ups have already entered this field.

ZeroAvia's business covers hydrogen production and aircraft manufacturing, with a focus on hydrogen as a potential alternative to jet fuel. The company's hydrogen-electric engines use hydrogen from fuel cells to generate electricity, which is used in the propellers that power the electric motors.

The only waste discharged is water. The company said that the electricity to produce hydrogen comes from solar energy, hydrogen combustion to generate water vapor, the entire closed-loop process is completely zero emissions, which is also the biggest benefit of using hydrogen fuel cells, but still needs to face the problem of high production costs.

As early as the beginning of 2023, ZeroAvia has completed the "first flight of the largest hydrogen-electric aircraft in history". After the end of this financing, the company's internal liquidity has become more abundant, which means that it is one step closer to the landing of zero-emission aircraft.

Val Miftakhov, founder and CEO of ZeroAvia, said that commercialization will begin gradually in 2024, with the initial goal of building 10-20 hydrogen aircraft with a range of 800 kilometers - which can meet the endurance needs of short-haul regional aircraft, and the long-term goal is to develop hydrogen power systems for 100-150 seat aircraft, which will become the "workhorse" of the future aviation field.

Gates, Li Ka-shing, Middle Eastern tycoons continue to raise

In addition to the latest funding, ZeroAvia has previously raised more than $150 million.

This start-up founded only 6 years ago, behind many "richest people", the capital lineup is luxurious, including Bill Gates, Li Ka-shing, the world-renowned aviation group British Airways, United Airlines, Alaska Airlines, etc., the "industry giant" Shell, Amazon, as well as the British government, Saudi Arabia's future new city NEOM...

ZeroAvia's financing rhythm is stable, with an average of 3-6 months to complete a new round of financing, with a financing amount of about 30 million US dollars (about 219 million yuan), Bill Gates, Li Ka-shing, Shell, Amazon and other old shareholders will continue to raise in almost every round of financing, and more and more aviation groups strategically invest in ZeroAvia and bring orders.

It is worth mentioning that one of the investors behind ZeroAvia, Bill Gates Breakthrough Energy Ventures (BEV), can be called "the most luxurious investment team in history".

This is a venture capital institution founded by Bill Gates in 2015, with the appeal of "the richest man", it has enlisted 28 of the world's top richest people or families such as Jack Ma, Pan Shiyi, Zuckerberg, Bezos, and Son Masayoshi as co-investors, with a fund size of $1 billion and an investment period of 20 years.

This "patience money" will be used to invest in scientific breakthroughs that have the potential to bring cheap and reliable clean energy to the world, with the ultimate goal of bringing new zero-carbon technologies to market. The fields involved include carbon dioxide capture, energy Internet of Things, biosynthesis, energy storage companies, sustainable fuels, power batteries and many other fields. These are expected to reduce carbon emissions by at least 500 million metric tons per year, even if they may not provide direct economic benefits to investors for the first 20 years.

Even the local tycoons in the Middle East, who made their fortunes on oil, are also transitioning to clean energy. NEOM, another investor of ZeroAvia, the Middle East consortium, is a typical example. NEOM (Saudi New Future City) is a new industrial and commercial city located in the northwest of Saudi Arabia. The project is the creation of Prince Mohammed bin Salman, who hopes to create an architectural marvel as iconic and timeless as the Egyptian pyramids. The city is planned to be completed in 2040 and will have 9 million residents by 2045, and the new future city will become an artificial intelligence city, a "zero-carbon world without roads and cars", and people will use "100% renewable energy", just like a Hollywood science fiction movie.

In addition, Shell, known for its lubricants, no longer emphasizes itself as a lubricant company, but as an energy company, and has been committed to the transition to clean energy in recent years. There is also Victoria Harbor Investment, an investment institution completely independent of Li Ka-shing's other industries, which has always provided Li Ka-shing with sufficient cash flow, and its every move represents Li Ka-shing's important strategy.

Investing in clean energy seems to have become the consensus of energy giants and top rich people.

Why do you want hydrogen-electric aircraft?

Hydrogen is recognized as a clean new energy source and is one of the ultimate solutions for zero-emission flight.

Aviation is a major carbon emitter, accounting for more than 2% of global emissions, and is the fastest-growing source of greenhouse gas emissions. However, in contrast, pure electricity also has the characteristics of low-carbon environmental protection, and the commercialization process of pure electricity seems to be faster than hydrogen energy at this stage, why do the big guys fancy hydrogen-electric aircraft instead of pure electric aircraft?

First of all, hydrogen energy is more environmentally friendly. In terms of carbon emissions, more than 70% of the current power generation is still thermal power generation, and the pollution generated by thermal power is also quite a lot. More than 85% of hydrogen energy is green hydrogen produced by electrolysis of renewable energy and nuclear power.

Secondly, hydrogen energy is more suitable for heavy-loading, long-distance flight. In terms of cruising capacity, pure electric cruising range is usually at the level of 100 kilometers, suitable for short travel, while hydrogen energy cruising range can be thousands of kilometers. At the same time, flying the same distance, the battery weighs about 40 times more than aviation fuel. And hydrogen energy can be like gasoline, to achieve rapid hydrogenation fuel, unlike pure electricity, long charging time. It can be seen that electrification technology has not yet developed to the extent that it can propel large aircraft or cargo ships.

Therefore, hydrogen energy can fill the gap in electrification technology and play an important role in the transformation of heavy industry.

According to the analysis of the "Medium and Long-term Plan for Hydrogen Energy Development (2021-2035)" released by the National Development and Reform Commission, about 60% of China's energy consumption will be electrified by 2060. For the remaining 40% of industries that are more difficult to electrify, the use of low-carbon fuels should be promoted. Industries such as heavy road transport, shipping and aviation, as well as heavy industries such as steel and chemicals, require portable, energy-dense fuels.

For these most difficult industries to decarbonize, hydrogen energy is a good alternative. The report predicts that hydrogen consumption will grow from the current very low level to more than 17 exajoules per year in 2060, equivalent to 580 million tons of coal equivalent, or 16% of total final energy consumption.

As a completely clean fuel, hydrogen energy is bound to start to exert its strength.

But the development of hydrogen energy is also difficult. First of all, the rapid development of power batteries has squeezed the living space of hydrogen fuel cells to a certain extent. The construction of pure electric refueling network is becoming more and more perfect, and hydrogen fuel cell replenishment still needs to start a new stove, which is not only costly. In terms of technology, there are still problems with the storage and transportation of hydrogen fuel.

Therefore, the role of patience and long money is also reflected here.