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Battery recycling is gaining significant traction in the venture funding landscape. Ascend Elements, a prominent player in this domain, recently secured a whopping $542 million in Series D funding. This comes on top of their earlier $480 million in DoE grants, showcasing the growing interest and investment in sustainable battery solutions.
Ascend Elements: Leading the Charge
Established eight years ago, Ascend Elements specializes in recycling lithium batteries into a substance known as black mass. From this, they produce cathode active materials (CAM) and precursor cathode active materials (PCAM). With the recent influx of funds, the company plans to establish a manufacturing facility in Kentucky. The goal? To refine black mass into sustainable materials ready for battery production.
Key Investors and Partnerships
BlackRock-linked Decarbonization Partners spearheaded the Series D funding round for Ascend Elements. Other notable contributors included funds managed by Singapore and Qatar, and the climate-tech investor, Fifth Wall. Despite BlackRock’s claims of environmental consciousness, it’s worth noting their continued investment in the fossil fuel sector.
Challenges and Opportunities
According to Ascend Elements CEO, Mike O’Kronley, while recycling batteries into black mass is relatively straightforward, the real challenge lies in producing high-value, battery-grade materials. The company is already operational with pilot facilities in Massachusetts and Michigan. With the upcoming Kentucky plant, they aim to significantly ramp up production, targeting 20 kilotons of PCAM annually by the end of 2024. Their clientele includes industry giants like Honda and SK Battery America.
The U.S. Battery-Recycling Boom
The U.S. has seen a surge in venture capital investments in companies focusing on battery recycling. Apart from Ascend Elements’ recent funding, other significant deals include Redwood Materials securing $1 billion in their D round and Green Li-ion’s $20.5 million “pre-Series B” funding. The U.S. Energy Department is also backing battery recycling tech with a $192 million initiative, aiming to reduce the country’s reliance on Chinese-produced batteries.
Global Trends and Insights
While the current enthusiasm around battery recycling is reminiscent of the climate-tech funding boom of 2021, global VC funding for battery-recycling firms is yet to reach its previous peak. Data from PitchBook indicates that in Q3 2021, funding reached $2.5 billion across nine deals. In contrast, the same quarter in the current year has seen $1.5 billion across seven deals.
The future of battery recycling looks promising, with companies like Ascend Elements leading the way. As the world shifts towards more sustainable energy solutions, investments in this sector are bound to increase, paving the way for a greener future.
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