There's a long road between dreaming up a fuel cell for portable electronic devices and making money on the idea. Just ask PolyFuel.
The Mountain View, Calif.-based startup said Thursday that it's going out of business and seeking a buyer of its assets after finding itself "unable to secure a satisfactory offer for the Company on a going concern basis," according to a company news release.
It's a quiet end for a company that sprung out of research house SRI International with plans to revolutionize the consumer electronics fuel cell market with its direct methanol fuel cell membrane.
Armed with more than $40 million in venture capital money from investors including Technology Partners and Intel Capital, the company went public on London's Alternative Investment Market (AIM) exchange in 2005.
It also raised about $5.5 million in federal funding over the years, most recently in April with $2.5 million in Department of Energy stimulus funds (see Green Light post). It announced a prototype of a rechargeable fuel cell, using replaceable cartridges of methanol, for a Lenovo ThinkPad notebook back in June 2008 (via CNET).
Direct methanol fuel cells convert methanol to water and carbon dioxide as they generate electricity, which is different than hydrogen fuel cells, which yield only electricity and water.
That's what makes hydrogen fuel cells appealing as replacements for internal combustion engines. But much-touted plans for hydrogen-fueled vehicles have languished amidst steep technical and logistical challenges (see Congress Looks to Restore Vehicle Fuel Cell Research Funding).
Methanol fuel cells, on the other hand, offer the promise of a cheap and easily stored fuel, making refueling a commercially viable option, at least in theory. Several startups are working on similar concepts.
PolyFuel isn't the only one of them facing tough times, however. MTI MicroFuel Cells has struggled as its parent company, Mechanical Technology Inc., was delisted from Nasdaq earlier this year and, as of mid-May, had spent about $3.1 million of $3.5 million in bridge loans it had secured. Toshiba has for several years touted DMFCs for TVs and other devices but the prototypes have yet to hit store shelves.
MTI also received a DOE grant for $2.4 million in April, by the way, indicating the important role that government has played in fuel cell development.
Many developers of portable fuel cells have relied on government contracts, often with the military, to keep themselves busy. Fuel cells for providing power to soldiers in the field or unmanned aerial drones could cost more than those that would seek to replace cheap and ubiquitous batteries for consumer electronics, after all (see Uncle Sam Wants Portable Fuel Cells).
Other fuel cell developers have found a market in forklifts or other non-road vehicles, which don't drive far from the warehouses or yards where they can be refueled (see Plug Power Puts Fuel Cells in Forklifts).
But fuel cell makers targeting the consumer electronics industry have been promising, and then failing to meet, self-imposed timelines for years now. Take Toshiba, which said in January it plans to release a methanol-based fuel cell battery charger by the end of March, only to see the month past without a product launch. Toshiba now says it will deliver the fuel cell battery charger in the next two months.
Still, the potential for a cost-effective portable fuel cell keeps investors coming. Lilliputian Systems Inc. landed $28 million in DATE from investors including Stata Venture Partners, Altira Group, Kleiner Perkins Caufield Byers, Atlas Venture, Fairhaven Capital and Rockport Capital (see Green Light post).
Medis Technologies in February released a fuel cell to power cell phones, flashlights and other small electronics, but it can't be refueled and costs $35 to $50 for 40 hours of power. Medis hopes to bring a refuelable cell to market in the next 12 to 18 months.