Battery Recycling : Redwood Materials raises $700 million in bid to become recycling powerhouse

Redwood Materials is set to become one of the world’s premier battery recycling companies.

The Nevada based tech start-up created by Tesla co-founder JB Straubel raised more than $700 million to boost its recovery of critical raw materials such as lithium, cobalt and nickel.

Capital raised in the first round will go towards the building of an additional processing site and will also be used to hire 500 more workers. The round was led by T. Rowe Price, with Goldman Sachs, Baillie Gifford, Canada Pension Plan Investment Board and Fidelity kicking in funds.

The company has raised at least $740 million since 2020.

Redwood’s current post-funding evaluation is $3,7 billion, according to a person familiar with the investment round.

The Tesla led boom in electric vehicles has resulted in a surging need for battery cells and critical battery raw materials. Yet the social and environmental aspects of mining cobalt, nickel and lithium render the practice fraught. Redwood aims to position itself as a ‘new generation’ mining company with a circular mandate, exemplified by its recovery of valuable materials intended for reuse in new batteries.

The company does this by recycling scrap from consumer electronics such as cell phone batteries, laptop computers, power tools, power banks, scooters and electric bicycles. It then proceeds to extract precious metals like cobalt, nickel and lithium from said e-waste and supplies it back to customers such as Panasonic.

Redwood expects to process 20,000 tonnes of scrap in 2021, according to Straubel. The goal, as envisioned by him, is to scale up recycling operations to the point that material can be delivered to supply millions of electronic vehicles, with facilities set to open in other parts of the US and Europe.

The company is also investing in material purification as well as researching the most effective ways of getting the mined critical materials back into the battery supply chain.

“In our view, the need for these materials will grow exponentially over time as we enter the era of de-carbonization,” Joe Fath, portfolio manager of the T. Rowe Price Growth Stock Fund, said in a statement, adding that “Redwood is well-positioned to be at the forefront of tackling this emerging and critically important problem.”