This was to be the breakout year for battery storage startup ViZn Energy Systems, Inc. Instead, 2018 may be the last year for the venture capital-backed developer of zinc-based flow batteries.

After the lead investor in the company's latest funding round unexpectedly backed out, the Austin, Texas-based company, which has a factory in Montana, was forced to let go nearly its entire 70-person staff in mid-March, interim CEO Stephen Bonner said in an interview. "My internal term for them is 'furlough,'" he added, noting that Vizn's executive team is in talks with "international investors" in hopes of finding a new strategic partner. "What we hope is that we can restart with a vengeance after this little hiatus."

Vizn, which Navigant Consulting Inc. in 2017 named the leading non-lithium-ion battery vendor, had been ramping up its factory to meet demand for its storage products, based on the belief that it had funding locked up. That, however, turned out to be a false assumption. "Our conviction, right down to the goal line, was that we had a substantial investor," Bonner said. "But that deal never did close, so that's a big hiccup."

The company has not filed for Chapter 11 bankruptcy protection and hopes to avoid doing so, he added.

Vizn's troubles mirror those of other aspiring battery startups seeking to challenge lithium-ion technology's dominant share of the emerging energy storage market, some of which have failed amid falling lithium-ion costs and surging manufacturing volumes at deep-pocketed global producers such as Samsung SDI Co. Ltd., LG Chem Ltd. and Panasonic Corp., which supplies battery cells to Tesla Inc. "That's part of the challenge," Bonner said. "But it's also a huge part of the opportunity. We are very much a disruptive technology with ecological, efficiency and operational advantages over lithium ion."

Relying on a zinc-iron chemistry dissolved in liquid electrolytes, Vizn Energy’s flow batteries avoid the toxicity and flammability problems of lithium-ion batteries and can store power for longer, achieving more than eight hours of discharge, according to the company.

Founded in 2009, Vizn Energy has raised "substantially more" to date than the $32 million tracked by S&P Capital IQ, the interim CEO said. He declined to disclose how much more, however, or give information about the investor that walked away. Vizn's latest filing with the U.S. Securities and Exchange Commission, from May 2017, shows the company was shopping an $11 million offering, of which nearly $7.7 million was listed as sold.