Montréal-based startup spun out of a McGill University lab is building an iron-based reactor for energy storage that it believes can reduce dependence on fossil fuels.

FeX Energy has raised $3.5 million USD ($4.78 million CAD) from Houston-based Fathom Fund, Toronto-based Amplify Capital, and Singapore-based Antares Ventures. The all-equity round closed on Sept. 5 and will help the company launch its first pilot project for an unnamed Ontario client.

“To solve the energy transition, we need all hands on deck.”

In an interview, FeX CEO Hayden Smith told BetaKit that the company’s proprietary iron reactor reduces the need for fossil fuels by storing renewable energy sources and transforming them into reliable power at high temperatures.

FeX’s reactor, which is housed in a shipping-style container, works through thermochemical reactions. Renewable energy, such as wind or solar power, is chemically stored in iron, raising its energy level through a reduction reaction. The energy is then released as heat. This “exhaust” is versatile, Smith claimed, and can be used to replace diesel and other relatively expensive fossil fuels.

The company is targeting heavy industries with a high reliance on fossil fuels, such as the mining sector, naval shipping, and heating buildings in remote areas. The business model is to sell its iron reactor to large clients looking to wean themselves off fossil fuels with an alternative spigot of energy at high temperatures.

Smith is also marketing the tech as dual-use, as he claims the energy storage technology could be used to power Canadian military operations in remote locations like the Arctic. This summer, the company received a $1-million prize from Canada’s Innovation for Defence Excellence and Security (IDEaS) contest for zero-carbon energy storage in the north.

FeX has seven full-time employees and five contractors, and plans to expand the team with the new funding. The capital will also go towards its pilot project in Ontario, where its iron reactor will be used to heat a handful of buildings with hydroelectricity as the initial source.

FeX Energy was founded in 2018 as a spin-out of McGill University’s Alternative Fuels Laboratory under professor Jeffrey Bergthorson, as well as Montréal-based cleantech venture builder Hard Climate, formerly known as BXVentures Canada. Bergthorson, who is also FeX’s chief scientific advisor, had dedicated nearly two decades to studying this field.

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Marc Guilbert, founder of Hard Climate, told BetaKit that FeX’s solution is one of the “dense, safe, and stable” options for energy, particularly for building and industrial heating processes. Guilbert is also a co-founder, president, and board chair of the company.

Smith has big ambitions for FeX. He hopes the firm will help reduce carbon emissions by half a billion tons per year by 2050. However, he also argued that the climate is at a “point of no return” due to carbon emissions. Global average atmospheric carbon dioxide exceeded 420 parts per million in 2024, which experts say is a main driver of extreme weather events, sea level rise, and other adverse climate consequences.

Canadian tech has seen a surge of interest in carbon capture and storage solutions as a way to offset carbon emissions, including technology from firms like Montréal-based Deep Sky. Though FeX isn’t providing a carbon capture storage solution, Smith thinks that all sorts of concurrent solutions are needed, given the urgency of climate change.

“To solve the energy transition, we need all hands on deck,” Smith said. “All solutions are warranted and useful.”

Feature image courtesy FeX Energy.