Expert voices: Piva Capital on natural hydrogen

Mining for natural hydrogen is still an unproven market, but Mark Gudiksen, managing partner at venture firm Piva Capital, is willing to take the risk.

Why it matters: Green hydrogen, from any source, is having a moment, and there's a growing contingent of companies trying to harness geologic occurring hydrogen underground.

• Piva backed Koloma, a startup from serial entrepreneurs using AI and sensors to explore for geologic hydrogen deposits.
• The venture fund is currently investing out of its second $250 million fund and typically writes $10 million to $15 million checks for Series A and B rounds for both decarbonization and digital.
• Gudiksen says for decarb investments, "everything comes back to unit economics."

This interview was lightly edited for clarity.

What in your view has been the biggest news in climate tech investing this year?

• "The recent projections of significantly rising U.S. electricity demand alludes to the opportunities and challenges of climate-tech at scale.
• Demand is being driven by a number of factors, including increased adoption of EVs, buildout of new industrial manufacturing, and, of course, massive data center expansion, in particular to support AI.
• These are attractive areas for sustainable economic growth, many of which overlap nicely with the IRA."

What would you add to the narrative?

• "Unfortunately, it will be a struggle to satisfy the demand purely with renewable power, due to a combination of grid capacity constraints, limited energy storage, and long permitting timelines, among other issues.
• As a result, a significant portion of the electricity demand will likely be fulfilled via natural gas — hopefully adding to the stimulus for the climate community to continue to push for climate-oriented regulatory policies coupled with investment in areas such as geothermal, nuclear, and lower-cost long-duration energy storage."

By contrast, what's going undernoticed?

• "I think the recent ocean warming data is extremely troubling.

• Ocean surface temperatures in 2023 and 2024 have been substantially warmer and we don't know why."

One tip for climate-tech investors or founders:

• "It's the economics, stupid."

Three fun things:

💼 First job:

• "Summer intern at Lawrence Livermore Lab writing code to analyze scientific data on the web in the summer of 1994."

👑 Proudest investment:

• "Koloma, which is focused on geologic hydrogen, is early and interesting.
• If successful, the technology could provide an accelerant for the clean hydrogen market with an economically scalable, environmentally attractive solution."

🤦🏻‍♂️ Facepalm investment or investment you wish you made:

• "I love to hate ag tech.
• Solutions are needed for more sustainable food production and technology can, in principle, meet those demands.
• Yet it's extremely challenging to identify opportunities that have the potential to scale and generate venture returns."

In three-ish words, the change you would make to climate-tech investing:

• "Normalize 'climate-tech investing' to just "investing."