Aquion Energy, a rising star among manufacturers of large-scale energy storage systems, announced on Wednesday it had filed for Chapter 11 bankruptcy reorganization amid struggles with fundraising from investors.
The company said it is in search of a buyer and hopes to emerge from bankruptcy “in the coming weeks.” It has laid off about 80 percent of its personnel, keeping only a core research and development team. The company has halted its factory operations in Westmoreland County and paused marketing and sales efforts, it said in a release.
“Creating a new electrochemistry and an associated battery platform at commercial scale is extremely complex, time-consuming, and very capital intensive,” read a statement jointly attributed to Scott Pearson, Aquion’s outgoing chief executive officer, and Suzanne Roski, a managing director at Protiviti, a Virginia-based consulting firm.
Ms. Roski was named Aquion Energy’s chief restructuring officer during the bankruptcy.
The statement continued, “Despite our best efforts to fund the company and continue to fuel our growth, the company has been unable to raise the growth capital needed to continue operating as a going concern.” Aquion could not be reached for comment beyond its statement.
The bankruptcy filing comes as the Lawrenceville-based manufacturer of sodium-ion batteries had apparently found success in deploying its technology. It generated hype and awards for its innovation, attracting investors along the way.
Aquion Energy had been spun out from Carnegie Mellon University in 2009 by Jay Whitacre, a CMU professor of materials science and engineering, attracting funding from venture capital firm Kleiner Perkins Caufield & Byers.
The year before, Mr. Whitacre had produced the first functioning aqueous hybrid ion battery, which the company has been producing since summer 2011. Aquion has been shipping its batteries commercially since mid-2014, according to its website.
Batteries like Aquion’s are considered the “holy grail” for widespread renewable energy development because they can store large amounts of energy for use during times when it is not easily produced — such as when the sun is not shining or when the wind is not blowing.
Aquion received many awards from energy and technology trade groups, and frequently shared its progress and thoughts on the battery market.
It was listed as one of the Massachusetts Institute of Technology’s Top 100 Smartest Companies in 2015 and 2016, as well as picking up an award in 2015 from a German organization supporting the energy storage industry.
Just six weeks ago, Aquion was named the 2016 North American Company of the Year by the Global Cleantech Group, a San Francisco-based group that recognizes companies annually.
In its statement Wednesday, the company continued to tout those accolades.
“Over its seven years of operation, Aquion has created a very promising energy storage platform and has proven that it can build a compelling product,” Mr. Pearson wrote.
He said that “a bankruptcy sale creates a unique opportunity for the right strategic buyer that can deploy transformative capital and synergies onto Aquion.”
Aquion Energy also got help from federal and state money to expand.
It received a $5.2 million grant from the U.S. Department of Energy in 2010 to open its manufacturing facility in Westmoreland County, with the expectation to eventually house more than 400 jobs. In 2011, the company announced it had closed a round of private funding worth $30 million.
Perhaps most famously, Bill Gates is listed among the company’s investors.
Aquion Energy disclosed in 2016 that it had pulled in another $33 million in 2016 to support its operations.
It’s unknown how many employees Aquion had before the layoffs, but in September 2014, the company said it had more than 150.
Aquion was approved to receive $16.6 million in state grants and loans from the the Pennsylvania Department of Community and Economic Development, according to the agency’s online investment tracker. It’s unclear whether the company used all of that money. The department could not be reached for comment.
Market analysts suggested the bankruptcy was not entirely surprising and that Aquion Energy deserved the praise.
“Aquion's claim isn't entirely incorrect — it was furthest along among the emerging storage technology cohort, with proven technological capabilities,” wrote Ravi Manghani, a Boston-based director of energy storage for GTM Research, a market research firm studying trends in green technology, in a blog post shortly after news of the bankruptcy.
But he said the financial challenges of surviving in this market are “not for the faint-hearted,” requiring “huge amounts of capital” to scale up and stay relevant.
“I wouldn't be surprised if it finds a good strategic buyer that's entrenched in the off-grid or microgrid business, both of which would be a good market fit for Aquion's chemistry.”
Daniel Moore: email@example.com, 412-263-2743 and Twitter @PGdanielmoore.