Bengaluru-based climate tech startup Newtrace, which builds electrolyzers, has raised $5.65 million in a seed round led by Sequoia Capital India and Aavishkaar Capital.

The round also saw the participation from investors Speciale Invest and Micelio Fund along with Ashish Goel, Founder-CEO of Urban Ladder and IKP Knowledge Park.

The funds will be used to expand Newtrace’s electrolyzer manufacturing and deployment capabilities.

“We are thrilled to secure this round of funding, which will enable us to scale our operations and meet the growing demand for our innovative electrolyzers,” said Prasanta Sarkar, CEO and co-founder, Newtrace.

“With this investment, we can further accelerate the global transition to green hydrogen, making sustainability an industry-scale mindset,” he added.

Founded in 2021, Newtrace develops and manufactures electrolyzers to reduce the cost of green hydrogen production by over 60%.

The company claims it reduces the green hydrogen production cost by combining its pioneering fluid engineering technology with an enhanced electrocatalyst that utilizes no rare earth metals. Its use of advanced manufacturing and a real-time analytics platform makes its electrolyzers a lucrative option for quick deployment and integration across industries.

Newtrace aims to deploy its electrolyzers to refineries, fertilizers, chemicals, steel and cement, and transportation sectors. It is also looking to expand its solution into providing technology for long-term storage and converting green hydrogen and ammonia.

The green hydrogen pathway can be a crucial enabler for India’s aspirations of building a low-carbon and self-reliant economy. The government launched the Green Hydrogen Mission in January this year and allocated ₹197.44 billion (~$2.3 billion) for capacity development.

Union Minister of Renewable Energy and Power R. K. Singh informed the Rajya Sabha that the government aims to reduce a total of ₹1 trillion (~$12 billion) worth of fossil fuel imports by 2030, following the targets set under the National Green Hydrogen mission.

Earlier this year, Singh said green hydrogen will play a central role in the country’s target to reach 500 GW of non-fossil capacity by 2030 and in developing energy storage solutions that could potentially replace lithium-ion-based batteries.