The recent seed round marks a milestone in the company's development journey, following its operational autonomy from its creator, TechEnergy Ventures (TEV), the corporate venture capital arm of the Techint Group.
As industries worldwide seek practical ways to reduce emissions, venture capital is playing an increasingly significant role in supporting innovative technologies. With the global push to scale up hydrogen production, methane pyrolysis stands out for its flexibility, cost efficiency, and carbon-free credentials. The International Energy Agency (IEA) estimates that hydrogen demand could double by 2040, with much of this growth expected to come from the heavy industry sector.
Tulum Energy, TechEnergy Ventures' first venture build company, is developing a methane pyrolysis technology to produce clean turquoise hydrogen and solid carbon. The company announced the closing of a $27 million seed financing round. The investment was led by CDP Venture Capital (through its Green Transition Fund) and TDK Ventures, with contributions from MITO Technology (via MITO Tech Ventures), Doral Energy Tech Ventures, and TechEnergy Ventures (TEV), the corporate venture capital arm of the Techint Group.
Tulum Energy was launched as a partnership between TEV and Tenova, a leading company in the provision of hydrogen-ready Direct Reduced Iron (DRI) and Electric Arc Furnances, the key technology and know-how that is being repurposed to produce clean, cost-effective hydrogen at a large scale for industrial users, addressing the economic and infrastructural challenges associated with green and blue hydrogen. It also unlocks additional value through the commercialization of solid carbon co-products, supporting industrial decarbonization.
"We're repurposing mature, commercially available machinery, components, and know-how," stated Massimiliano Pieri, CEO of Tulum Energy. "That's what makes us capital-efficient and ready to scale. With this approach, we can supply hydrogen to industries like steel, ammonia, and chemicals without relying on tax credits or subsidies. We're not waiting for electrolyzers or new transmission lines. We're using what's already there and turning it into a zero-carbon solution."
This pragmatic approach reduces technical risk, shortens development timelines, and provides the company with a fully developed supply chain of equipment and components that enables a unique cost competitiveness curve, while facilitating integration with existing industrial ecosystems.
Proceeds from this seed funding round will be strategically directed toward constructing the company's pilot plant in Pesquería, Mexico, located within the industrial complex of Ternium, a Techint Group company.
"Ternium is one of the largest steel producers in the Americas, and they are uniquely positioned to take advantage of cost-competitive low-carbon hydrogen for their DRI (Direct Reduced Iron) processes. It's an ideal strategic partner," underlined Alejandro Solé, TEV's Chief Investment Officer.
Tulum Energy represents the first venture entirely created and spun out from TEV's venture-building platform. This process combines the internal expertise provided by Techint Group's industrial system with the agility and discipline of a startup, supported by a coalition of global investors.
Venture-building is an innovation tool that enables corporations to capitalize on their know-how and expertise in segments that may be outside their core innovation priorities, while providing the project with the speed and agility of startups with whom they will ultimately compete. While the venture-building approach has the potential to generate significant financial returns, it typically faces the structural challenges and inertia of corporations, resulting in few success stories.
"Our focus is investing in startups, but when the opportunity arose and we built conviction on the technology fundamentals, we were eager to see if we could unlock an innovation path for the talent and expertise that resides at the Techint Group," remarked Solé.
"We started working with the concept of repurposing an electric arc furnace as a result of in-house experiments and our deep knowledge of EAFs," said Paolo Argenta, EVP of Tenova's Upstream Business Unit. The idea took shape through in-house prototyping and analysis of the opportunity to scale turquoise hydrogen production for industrial uses.
However, this was outside of Tenova's strategic priorities but within TechEnergy Ventures' investment scope. At the same time, the capital requirements to demonstrate the technology necessitated the formation of a syndicate that included outside investors.
Over the course of three years, TEV partnered with Tenova for the development of the technology, with Techint Engineering & Construction for the initial engineering work, and with Ternium to secure a pilot opportunity.
"From the beginning, we knew the only way to build a pilot plant was through a syndicate of investors, so our work plan contained all the milestones required for institutional investors to underwrite the opportunity ", stated Solé.
That's how Tulum emerged: from a serendipitous insight identified by Tenova and strengthened by TechEnergy Ventures through a structured internal process aimed at exploring new industrial decarbonization pathways aligned with the Techint Group's strategic priorities.
The venture building process included:
Once the technology, team, and roadmap were in place, Tulum was established as an independent company, a crucial step in raising external capital.
"We structured the workplan and the process, putting a lot of emphasis on what investors like ourselves are ultimately looking for in a startup: a differentiated approach that can lead to a sustainable advantage, a team with an entrepreneurial track record and technical know-how in the segment, and a clear technology and go-to-market strategy. We reached out to investors for early feedback, and once we secured the team, we knew we had all the key pieces in place for a successful fundraise," said Solé.
Building a qualified team to lead the venture was the most critical intermediate milestone in the journey, as it was the first concrete external validation that the concept had potential, "when we saw the quality and experience of candidates who were interested in joining this venture and ready to take entrepreneurial risk, we felt we were onto something with strong potential," Andrea Siciliani, Principal at TechEnergy Ventures.
The last but ultimately challenging task was raising $25 million at the seed stage, which is significantly larger than traditional rounds at this stage. While the technical team was convinced that this was the most efficient de-risking path, Tulum needed to convince outside investors.
"We were very transparent and straightforward with investors from the beginning, knowing that spending time at the lab was not going to produce any meaningful de-risking, which is precisely why securing investment for the pilot plant was essential. Investors understood that the larger requirement of an initial seed round was offset by the unique accelerated roadmap that leveraging existing technologies and suppliers will give us after the pilot," remarked Siciliani.
That fit helped close the $27 million seed financing round with some of the leading players in the industry. CDP Venture Capital, which manages Italy's Green Transition Fund, is committed to supporting Tulum's Milan-based R&D hub by leveraging the Italian manufacturing supply chain. TDK Ventures, the VC arm of Japanese electronics giant TDK, contributed its global technology network to accelerate commercialization, while MITO and Doral Energy Tech Ventures added institutional depth.
Given the project's growth ambitions and the capital required to de-risk and industrialize a pilot, a structure and governance model aligned with venture capital expectations was necessary. TEV structured the company as a typical venture-backed startup, with an independent board and external shareholders. This independence was crucial in attracting institutional investors to the round.
From the outset, TEV acknowledged the compound risk of building a company from scratch - specifically, the inherent risk of the venture-building model - combined with the high uncertainty typical of early-stage, technology-intensive startups.
In that sense, Tulum Energy demonstrated that it is possible to generate investable, externally backed ventures using its internal capabilities. Its success will depend on its ability to deliver on its roadmap, but the process itself has set a precedent for a new path of innovation.
"The venture-building effort proved that the Group can innovate in a way it had never done before. The process was complex and took almost three years. Still, the venture-building model and everything we learned in its development are already assets that can be applied to other projects," affirmed Siciliani.
The experience provides a blueprint for future innovation efforts, particularly in areas adjacent to core businesses that align with the Group's broader strategy for energy transition.
TechEnergy Ventures is also working to support other corporations that have in-house technologies that could become attractive venture build cases, as well as entrepreneurs in the exploration phase, by providing capital to support the build-out and the lessons learned from having walked that path before.