Google is the latest investor to back Redwood Materials as the battery recycling and cathode manufacturing startup scales a new energy storage business to power artificial intelligence data centers and other industrial sites.
Founded by former Tesla CTO JB Straubel, Redwood Materials raised $350 million last October in a Series E round led by venture capital firm Eclipse. The round included a new strategic investment from Nvidia’s venture capital arm, NVentures.
More investors have since piled in, including newcomer Google, pushing the Series E round to $425 million, the company said. Existing investors Capricorn and Goldman Sachs also returned with new investments.
The company’s valuation was not publicly disclosed, but a source familiar with the round told TechCrunch its post-money valuation was north of $6 billion, more than a billion higher than its previous valuation. This latest investment pushes Redwood’s total private capital raised to $2.3 billion.
The attraction for Google, Nvidia and others in this latest round appears to be energy storage — and its ability to power data centers — a newer business venture in the Redwood.
Redwood materials was founded in 2017 to create a circular supply chain for batteries. It initially focused on recycling scrap from the production of batteries and consumer electronics such as mobile phone batteries and laptops. Redwood processes scrap and extract traditionally mined materials such as nickel and lithium. The newly processed materials are then sold to customers such as Panasonic, who use them to make batteries.
Redwood continued to expand its operations beyond recycling. The Carson City, Nevada-based company added cathode production several years ago, and last summer launched an energy storage business that reuses EV batteries that aren’t ready for recycling and turns them into microgrids that can power artificial intelligence data centers and large-scale industrial facilities.
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This new business, called Redwood Energy, was launched as demand for data centers skyrocketed.
“As electricity demand grows – driven by artificial intelligence, data centers, manufacturing and electrification – energy storage is no longer optional; it’s essential infrastructure,” the company said in a blog post announces new funding.
And Redwood appears to have the wherewithal to power at least some of those data centers. The company said in June that it recovers more than 70 percent of all used or discarded battery packs in North America, many of which can have a second life as energy storage.
Redwood said last year it had more than 1 gigawatt-hour’s worth in its inventory and is expected to receive another 4 gigawatt-hours in the coming months. The company expects to deploy 20 gigawatt-hours of grid-scale storage by 2028.
Correction: Redwood has raised a total of $2.3 billion. the previous scheme was incorrect.
