Battery recycling and cathode manufacturing company Redwood Materials has raised $350 million to grow its new energy storage business to fuel the AI data center boom.
The Series E round, led by venture firm Eclipse, also includes a new strategic investment from Nvidia’s venture capital arm NVentures. The company’s valuation was not disclosed, but a person familiar with the round told TechCrunch that the valuation is about $6 billion, $1 billion more than its previous valuation.
The funds will be used to expand the company’s fast-growing energy storage business and refining and materials production capacity. Redwood, founded by former Tesla chief technology officer JB Straubel, also plans to add more engineers and staff to its operations team.
When Redwood Materials was founded in 2017, it set out to create a circular battery supply chain, focusing on manufacturing battery cells and recycling scrap from consumer electronics products such as cell phone batteries and laptop computers. The growing business involves processing waste goods and extracting commonly mined materials such as cobalt, nickel and lithium. Redwood supplies these materials to customers such as Panasonic, GM, and Toyota.
Redwood has since added related new initiatives such as cathode manufacturing. Most recently, the company started an energy storage business that uses thousands of salvaged EV batteries to power businesses. The business, called Redwood Energy, is primarily aimed at servicing AI data centers and other large industrial sites.
Redwood has a large stockpile of EV batteries that have too long a lifespan to go through the recycling process. The company is building an off-grid system that connects these used EV batteries with renewable energy sources such as wind and solar to power AI data centers and industrial sites. The system can be connected to the electrical grid, and Redwood said the EV’s battery could also be connected to natural gas turbines or future nuclear power plants for large-scale energy storage.
The supply is also plentiful. The company collects more than 70% of all used or discarded battery packs in North America, but not all are immediately recycled. As of June, Redwood had more than 1 gigawatt-hour of batteries available for energy storage. The company plans to deploy 20 gigawatt hours of grid-scale storage by 2028, putting it on track to become the largest recycler of used EV battery packs.
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