Koloma raises $50M more in quest to find natural hydrogen underground

Hydrogen is expected to play a key role in shifting heavy-duty industries away from fossil fuels. But today’s methods for making hydrogen are either carbon-intensive — such as steam methane reforming with fossil gas — or currently cost-prohibitive, like using huge amounts of renewable energy to split water molecules.

The startup Koloma is working to unleash H₂ in another way. The Denver company is scouring the earth for underground reservoirs of naturally occurring hydrogen, which represents something like the holy grail for the energy transition: pure, carbon-free fuel that can be pulled straight from the source.

This week, Koloma raised a $50 million Series B extension round, bringing the company’s total investment to more than $350 million since it launched in 2021. Japan’s Osaka Gas and Mitsubishi Heavy Industries led the latest funding round, signaling the growing global interest in what, as of now, remains a mostly untapped clean energy resource.

Canary Media recently spoke with Koloma CEO and co-founder Pete Johnson about the startup’s big — and risky — ambitions as part of this year’s ongoing SOSV Climate Tech Summit.

Geologic hydrogen could be ​“the world’s first new primary energy source in 100 years,” Johnson said during the conversation. ​“This will be kind of a skeleton key in decarbonization.”

Scientists have long known that hydrogen occurs in nature. Most of it originates from a process called serpentinization, which happens when subterranean water comes in contact with iron-rich rocks and creates iron oxides — leaving behind hydrogen. The gas can then make its way up through permeable rock and soil, forming deposits trapped within underground domes.

However, very little is known about exactly where those deposits are, or how much H₂ they might contain. To date, most discoveries of geologic hydrogen have happened by accident. Koloma and other startups and research teams are now trying to locate accumulations of hydrogen and, potentially, supply the resource at an industrial scale.

In the interview, Johnson explained how Koloma is hiring experts and deploying technologies from other earth-scouring industries, including oil and gas exploration and mining. Hydrogen exploration efforts are still in their infancy, and they aren’t guaranteed to yield H₂ at the world-changing levels that have occurred for other fuels, like with, the discovery of big oil fields or shale gas formations. But finding and extracting these deposits aren’t the only challenges; figuring out how to transport the fuel cost-effectively is a monumental task of its own.

The sizable uncertainties haven’t deterred major climatetech investors like Khosla Ventures and Breakthrough Energy Ventures from pouring many millions of dollars into this quest. Johnson said that most of Koloma’s backers are also investing in companies working to develop next-generation jet fuel or green ammonia for fertilizer and cargo shipping — sectors that could require copious amounts of clean, cheap hydrogen to decarbonize.

“It’s not a done deal, or a sure bet,” Johnson said. ​“But if it works, it’s going to have a huge impact on the way we’re thinking about the energy transition.”