Google is the latest investor to back battery recycling and cathode production startup Redwood Materials as it expands into new energy storage operations to power AI data centers and other industrial sites.
Redwood Materials, founded by former Tesla chief technology officer JB Straubel, raised $350 million in a Series E round led by venture firm Eclipse last October. The round included a new strategic investment from NVentures, Nvidia’s venture capital arm.
Since then, it has attracted more investors, including newcomer Google, bringing the size of its Series E to $425 million, the company said. Existing investors Capricorn and Goldman Sachs also returned with new investments.
The company’s valuation was not disclosed, but sources familiar with the round told TechCrunch that the company’s valuation is more than $6 billion after the funding, more than $1 billion higher than its previous valuation. This latest investment brings Redwood’s total funding to $4.9 billion.
The appeal for Google, Nvidia and others in this latest round appears to be a new business venture within Redwood: energy storage and its ability to power data centers.
Redwood Materials was founded in 2017 to create a circular supply chain for batteries. The company initially focused on recycling scrap from battery manufacturing and consumer electronics products such as cell phone batteries and laptop computers. Redwood scraps and extracts traditionally mined materials such as nickel and lithium. The newly processed material is sold to customers such as Panasonic, where it is used to make batteries.
Redwood continues to expand beyond recycling. The Carson City, Nevada-based company added cathode production several years ago and last summer launched an energy storage business that repurposes EV batteries that aren’t ready for recycling and turns them into microgrids that can power AI data centers and large industrial sites.
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The new business, called Redwood Energy, was launched as demand for data centers skyrocketed.
“As power demand skyrockets due to AI, data centers, manufacturing, and electrification, energy storage is no longer an option, but an essential infrastructure,” the company said in a blog post announcing the new funding.
And Redwood appears to have the means to power at least some data centers. In June, the company announced that it was collecting more than 70% of used or discarded battery packs in North America, many of which could have a second life as energy storage.
Redwood said it had 1 gigawatt-hour worth of inventory last year and expects to add another 4 gigawatt-hours worth of supply in the coming months. The company expects to deploy 20 gigawatt hours of grid-scale storage by 2028.
