HydrogenOne Capital Growth’s Strohm completes €30m capital raise

HydrogenOne Capital Growth (HGEN) has announced that its portfolio company, Strohm Holding B.V. (Strohm), has successfully completed a new €30m (£25m) capital raise. Strohm is the world’s first and leading producer of Thermoplastic Composite Pipe (TCP), which can be used across conventional energy, as well as renewable applications, greatly reducing the associated technology risk. Strohm will use the proceeds of the capital raise to continue scaling up and accelerating the expansion of its manufacturing operations, enhancing what it describes as its capacity to deliver its unique TCP solutions both to traditional offshore customers, and for energy transition applications in offshore hydrogen and carbon capture.

The funding round was led by a €20m investment by SENCO Hydrogen Capital (SENCO) and benefited from support from both new investors and existing shareholders. This included €1.2m from HGEN. SENCO is a private equity firm specialising in investments in the hydrogen and energy-in-transition sectors. HGEN says that SENCO’s investment further underscores its conviction in Strohm’s potential in the energy transition. At 31 March 2024, HydrogenOne’s investment in Strohm represented 12.4% of the company’s NAV.

We discussed Strohm in our April 2024 note on HGEN (click here to read more) where we explained that Strohm was one of the main drivers of HGEN’s NAV improvement over 2023. Strohm’s clients feature multi nationals such as ExxonMobil, TotalEnergies, and PRIO with projects including natural gas pipeline installations off the coast of Brazil and Congo and a more recently announced development in Guyana which was the largest contract ever secured by Strohm. The Guyana project was also a technological success with Strohm successfully installing its first deep-water / high pressure TCP jumper at water depths of 1,700m, opening up the possibility of a range of potential markets. Strohm achieved profitability ahead of schedule, converting exceptional year on year revenue growth of 200% into positive EBITDA in Q4 2023.

Comments from Dr JJ Traynor, managing partner of HydrogenOne Capital LLP (HGEN’s investment adviser)

“Strohm is a pioneer in the development of TCP, and this newly secured investment will further enable Strohm’s management team to continue to scale up its manufacturing operations. Strohm’s technology addresses the significant need to reduce CO2 emissions in the pipeline infrastructure sector.”

Comments from Bernhard Mohr, chairman of the supervisory board of Strohm and managing director of EVONIK Venture Capital

“With the value-adding and outstanding expertise of the SENCO team in the field of energy transformation investments, we are strengthening Strohm’s position as an innovator and pioneer in the development of TCP. We look forward to working with SENCO as a shareholder in Strohm to develop innovative solutions to shape a sustainable future and address the challenge of our time.”