$157M+ for On-site Hydrogen Supply as a Service — Mo Vargas, CEO of BayoTech
Led by CEO Mo Vargas, BayoTech provides on-site hydrogen supply for industrial customers at an industry-leading carbon intensity and economic rate using a pay-as-you-go model that reduces upfront capital costs.
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What is your all’s focus at BayoTech?
Our basic goal is to provide low to zero-carbon hydrogen at the cheapest cost possible. We primarily offer this through a service called BayoGaaS wherein we build, own, operate, and finance projects and then sell that to the end-user which reduces the upfront capital cost to the customer. Our onsite generators have a lower carbon intensity than many of the traditional offerings such as electrolyzers due to the reduction in transportation and conversion losses.
What does the decision process look like for your customers that may be switching from another type of fuel source?
The two primary concerns are carbon intensity and cost. On the carbon intensity front, customers are often overwhelmed by ESG concerns and the need to adopt cleaner solutions. There are many cool applications of clean technology and hydrogen, but the notion that an industrial customer needs to get into the hydrogen production business can be daunting. We simplify this with our BayoGaaS offering. On the cost side, we know that the industry is primarily motivated and moved by the least cost solution. We can produce hydrogen at less than $2 per kilogram, which is far lower than the majority of the industry and makes our offering extremely compelling to customers.
Can you paint a picture of what your deployed system looks like?
Our projects are built in standard 40-foot shipping containers. This standard-design is sleek, safe, and convenient, and our units can be moved to new locations as needed. We have remote monitoring of the operation of all our units and are actually building out office space to provide 24/7 global monitoring of this data. Our units are operated remotely.
What does BayoTech look like in five years?
We believe the company will be generating about a billion dollars in annual revenue. We intend to remain the lowest-cost provider of hydrogen while maintaining industry-leading carbon intensity. The company will also likely expand into adjacent verticals in the hydrogen space where we see an opportunity to provide value to the end-user. We will also place great emphasis on the people at the company to ensure that BayoTech remains a great place to work for those doing the hard science as well as those involved in the engineering, manufacturing, and distribution of our products.
What are some lessons learned from your experiences as an entrepreneur?
I think entrepreneurship comes with a lot of learning, iterating, and hard work. By definition, the entrepreneur sees something that others do not, which often makes the fundraising process difficult. It requires a lot of looking in the mirror to understand whether you are being stubborn or if you are truly onto something with potential. As it applies to Bayotech, the pivot into on-site hydrogen production and away from the ammonium space made everything much easier. This demonstrates the importance of being open to iteration and allowing yourself to see multiple perspectives. Talk to potential customers, talk to other people in the industry, and do not isolate yourself behind the computer.
What was your path prior to BayoTech?
I was trained as an engineer, but I’ve spent about half my career working as an executive in Fortune 500 companies and the other half as an entrepreneur working with smaller enterprises. I’ve been fortunate to have some great mentors at companies like Lockheed Martin before making the move into the startup space. My smaller venture experience has always involved what I would call “last mile commercialization” of climate solutions. I truly believe that you can make great financial returns while doing well for the environment.
Do you have a book recommendation for others?
I would recommend Think and Grow Rich by Napoleon Hill. Hill interviewed and studied 500 of the most prominent entrepreneurs and thinkers of the 19th and 20th centuries including Carnegie and Rockefeller and tried to extract the commonalities of what made these individuals successful. The book was originally written in the 1930s but it's amazing how much of it is still relevant today.
Do you have a podcast recommendation?
I always recommend the Everything About Hydrogen podcast, of course. I also like the Energy Gang which I think is a good summary of the cleantech space. And I’ve enjoyed listening to episodes of your podcast, The Climate Torch at Entrepreneurs for Impact, as well.
Do you have a quote that keeps you focused or motivated?
“Our only limitations are those we set in our own minds.” As a father of three, this is something that I constantly try to instill into my kids but also in those I work with. If you truly believe in yourself and are given an opportunity, you will be off to the races. I think this is largely what makes BayoTech so special. I don’t think that I have ever been surrounded by such a hardworking, motivated, and straightforward team of executives.
If you could share a resource or advice with entrepreneurs what would that be?
First, I would say there has never been a better time to be in the climate solution space. There is a huge need and a lot of money to put behind innovative solutions. I would also advise that those who are building a company reach out to investors, get constructive feedback, iterate on ideas, and do it with velocity. Finally, it’s important to surround yourself with the best people possible and simply execute.
What would you say to traditional investors that might not have experience in the ESG space?
We had a lot of experience educating investors as part of our process in raising a Series C round last year. I think the math is pretty clear that having some exposure to the climate/ESG space leads to superior portfolio returns and certainly justifies interest in the space. However, beyond the economics, I think it is also incredibly rewarding on a personal level to know that you are funding companies that are truly making the world a better and more livable place. With the increasing interest from strategic partners and changing government policies, the climate space is only going to continue to grow. If you are not in the climate sector now, then when?
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Note:
THE TORCH is an interview series from Entrepreneurs for Impact. We profile CEOs and investors mitigating climate change. Our goal is to highlight their work and inspire others. As we deal with multiple crisis, from Covid and racial injustice to climate change and economic recession, we need some of this positive light in what seem like dark times. Onward and upward.