Final fall Swedish lithium-ion battery maker Northvolt introduced that it had raised $600 million in fairness to put money into capability enlargement, analysis and growth, and large-scale recycling.
The capital elevate included institutional buyers Baillie Gifford, Baron Capital Group, Bridford Investments Restricted, Norrsken VC & PCS Holding along with non-public buyers Cristina Stenbeck and Daniel Ek. It was joined by present Northvolt shareholders Goldman Sachs
The $600 million represented a considerable capital elevate for a corporation that isn’t precisely a family identify within the U.S., however Northvolt CEO Peter Carlsson had beforehand made clear the corporate’s intent to upend Chinese language domination of the European market: “There’s a reasonably important export move of used batteries to China, and that’s silly. It’s essential to maintain these flows inside Europe.”
Northvolt made the largest deal within the battery house in 2020, but it surely was an enormous 12 months general for the rapidly-growing sector. Mercom Capital Group, a world communications and analysis and consulting agency targeted on cleantech, not too long ago launched its This fall and Annual 2020 Funding and M&A report for the battery storage, sensible grid and power effectivity sectors.
A number of the key findings from the report embody:
- Battery storage, sensible grid and power effectivity corporations introduced in $8.1 billion in company funding in 2020, in comparison with $3.8 billion in 2019.
- Company funding in battery storage was up 136% with $6.6 billion in 54 offers in 2020.
- World VC [venture capital] funding for battery storage, sensible grid and effectivity corporations in 2020 was 12% larger with $2.6 billion. in comparison with $2.3 billion raised in 2019.
The report famous that lithium-ion primarily based battery expertise corporations obtained probably the most VC funding in 2020, with $649 million. However different storage classes additionally obtained funding, together with solid-state batteries, power storage downstream, power storage programs, and move batteries.
Investor curiosity within the house is clearly on the rise. In 2020, 105 VC buyers participated in battery storage offers in comparison with 78 in 2019. Breakthrough Vitality Ventures was the highest investor in 2020. Utilities and oil and fuel corporations have been concerned in 4 battery storage funding offers in 2020.
The report’s highlights additionally famous:
“In 2020, introduced debt and public market financing for battery storage corporations was up considerably with $5 billion in 22 offers in comparison with $1.1 billion in 10 offers in 2019. That is the very best quantity raised in public market financing since 2014. Northvolt’s $1.6 billion and Plug Energy’s
There have been 19 M&A transactions within the Battery Storage class in 2020, of which two disclosed transaction quantities. A complete of 24 battery storage and photo voltaic plus storage M&A transactions have been introduced in 2020 in comparison with 11 in 2019.”
Up to now, China has dominated the lithium-ion battery house. The nation has a significant benefit of low-cost labor, plus China has extra lithium reserves and higher lithium manufacturing than most international locations. In 2018, Chinese language lithium manufacturing was 7,500 metric tons, third amongst all international locations and over eight occasions U.S. lithium manufacturing.
However among the offers introduced in 2020 symbolize an essential shift in growing a strong battery trade that isn’t absolutely reliant on China.
A giant a part of this technique is mirrored by Northvolt’s funding in battery recycling. A latest IHS Markit Report famous:
“Giant waves of end-of-life batteries (batteries on the finish of their usable life) are set to start this 12 months, making a sizeable repository of recyclable materials. IHS Markit
With the world more and more shifting within the route of electrical autos, and with the anticipated explosion within the quantity of batteries that want recycling, the numerous funding in Northvolt appears to make good strategic sense.