FeTu Roticulate is a four-chamber heat engine that aims to reduce energy consumption and emissions.
Engineer and designer Jonathan Fenton left his job at Elland-based manufacturer ValveTek to launch FeTu in 2017, after a 35-year career as an engineer.
His invention has attracted interest from 15 UK universities, including Huddersfield and Sheffield, following a successful one-year test programme at the University of Bath.
FeTu now employs four people and plans to double in size over the next two years.
It has been awarded £7,000 toward a £15,000 investment in digital technology from Digital Enterprise, which provides funding for Leeds city region businesses to upgrade their digital technology and connectivity.
Mr Fenton said: “The backing from Digital Enterprise has made a big difference in enabling us to get on with guiding our product through the development process – so that it can become commercially available.”