Battery recycler and cathode maker Redwood Materials has raised $350 million as it builds its new energy storage business in a bid to fuel the AI data center boom.
The Series E round, led by venture capital firm Eclipse, also included a new strategic investment from Nvidia’s venture capital arm, NVentures. The company’s valuation was not disclosed, but a source familiar with the round told TechCrunch it was around $6 billion, a billion higher than its previous valuation.
The funds will be used to expand the company’s growing energy storage business as well as its refining and materials production capacity. Redwood, founded by former Tesla CTO JB Straubel, also plans to hire more engineers and staff for its operations team.
When Redwood materials was founded in 2017 and set out to create a circular supply chain for batteries by focusing on recycling waste from the production of battery cells and consumer electronics such as mobile phone batteries and laptops. This business – which continues to grow – involves processing these discarded goods and extracting commonly mined materials such as cobalt, nickel and lithium. Redwood supplies these materials back to its customers such as Panasonic, GM and Toyota.
Redwood has since added new, related pursuits such as cathode production. More recently, he started an energy storage business that uses the thousands of EV batteries he collects to provide power to companies. This business, called Redwood Energy, is largely aimed at serving AI data centers as well as other large-scale industrial spaces.
Redwood is found in vast quantities of EV batteries that have too long a life to go through the recycling process. The company connects these retired EV batteries with renewable energy sources like wind and solar power to create an off-grid system that sends power to AI data centers or industrial facilities. The system can be connected to the grid, and Redwood says EV batteries can also be connected to natural gas turbines or future nuclear generators for large-scale energy storage.
It has plenty to offer. The company recovers more than 70% of all used or discarded battery packs in North America, and not all are immediately recycled. As of June, Redwood had stored more than 1 gigawatt-hour worth of batteries that could be used for energy storage. By 2028, the company plans to deploy 20 gigawatt-hours of grid-scale storage, putting it on track to become the largest reusable EV battery pack.
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