How Hydrostor scaled a bold idea into an even bigger business
Founded: 2010
Sector: Cleantech
Services: Momentum
CEO Curtis VanWalleghem and his team have steadily built up its novel energy storage solution.
Curtis VanWalleghem was determined to solve a big clean energy problem: ensuring power grids can run on renewable sources — even when the sun has set or winds have died down. And in 2010, he launched Hydrostor to do just that.
The idea behind the Toronto-based venture is to create massive energy-storage facilities using what’s called advanced compressed air energy storage. Off-peak electricity is used to compress and heat air that is then transferred to a proprietary thermal storage for later use, while the compressed air is pumped into an underground cavern designed to maintain a stable pressure. Essentially, the energy from the electricity has been divided into two elements — the stored heat and the compressed air — and can be recombined to run a turbine to produce power, acting as a giant battery.
Turning this concept into reality, however, was anything but easy.
The Challenge: “The process of validating our business concept was a long journey,” recalls VanWalleghem. “I quit my job, drained my savings and went without a salary for a few years to really get behind this opportunity.”
As risk turned to reward, Hydrostor joined MaRS to help accelerate its growth. Dennis Ensing, chief venture advisor and vice president of venture programming at MaRS, immediately spotted the obstacles. “Right from the get go, Hydrostor’s biggest challenge was pulling together the team and funding necessary to pursue significant projects” says Ensing. “There were a lot of discussions about the finance structuring they needed to go from bench to proof of concept.”
But VanWalleghem and his team faced another big question: Where were they going to build these massive underground facilities?
The Strategy: “It was clear there was no immediate opportunity in Canada, so that brought us to Australia and California,” says VanWalleghem. “Expanding into those other jurisdictions meant dealing with totally different laws and industry structures. We were outsiders.”
Hydrostor leaned into MaRS Momentum’s offerings, accessing foreign market insights and benchmarking studies. Peer community gatherings provided VanWalleghem an opportunity to swap war stories and advice with fellow CEOs.
As for financing, Hydrostor took a step-by-step approach. The company raised for each stage of the validation process from engineering models all the way up to a $15-million small-scale commercial system in Goderich. “When that worked, it went from being a theory to it being real,” says VanWalleghem. “It cleared the pathway to scale.” In 2022, the company raised U.S.$250 million.
“The recognition of being profiled as a MaRS Momentum client helps when you’re talking to government officials, customers or investors,” he says. “That led to big wins and market validation.”
The Impact: Hydrostor is now helping to usher in a clean energy era, working on the construction of two large facilities: one in California and one in Australia that are slated to open in 2026 and 2028. The company has signed a 25-year contract with Central Coast Community Energy and has also been selected for a 40-year contract with TransGrid in Australia acquired 100 percent ownership of Australia’s Silver City Energy Storage Centre.
“We’re scaling the business to have a real impact,” says VanWalleghem. “Now that we’ve got the financial backing and the team in place, it’s all about execution.”
Funded in part by the Government of Canada through the Federal Economic Development Agency for Southern Ontario, the Momentum program works with high-growth Canadian companies to accelerate their path to hitting $100 million in revenue. Is your business Canada’s next anchor company? Find out more and apply to join the program.