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cVenture funding for battery recycling startups has been surging lately, and the latest to see the IRA-driven upside is Ascend Elements, which announced a massive $542 million in Series D funding, on top of the $480 million in previous DoE grants.
The eight-year-old company recycles lithium batteries into black mass and produces cathode active materials (CAM) and precursor cathode active materials (PCAM). It’s putting those hundreds of millions in recent funding into a manufacturing facility in Kentucky, where it plans to refine the black mass into durable, battery-ready materials.
BlackRock-linked Decarbonization Partners led Ascend Elements’ D round. Some other big names also contributed, including funds managed by Singapore and Qatar, as well as climate tech investor Fifth Wall. Although BlackRock markets itself as an environmentally conscious investor, the company is still pumping a lot of money into the fossil fuel industry.
“Recycle batteries [into black mass]is honestly on the easy side,” Mike O’Kronley, CEO of Ascend Elements, said in a conversation with TechCrunch on Monday. “So there are many companies involved in recycling batteries. What is a challenge is making really high-quality battery-grade materials on the output side.”
Ascend Elements tells TechCrunch that it is already doing this work from pilot facilities in Massachusetts and Michigan. The company plans to produce many more battery-ready materials (20 kilotons of pCAM per year) at its Kentucky plant after it starts operating there around the end of 2024. Ascend Elements’ current customers include Honda and SK Battery America.
Battery recycling tree
Particularly in the US, venture capital firms are handing over a ton of money to companies that ultimately play a role in turning used batteries into new ones. Other deals this year, in addition to Ascend Elements’ $542 million, include: Redwood Materials’ $1 billion D round, Nth Cycle’s targeted $50 million Series B and Green Li-ion’s $20.5 million “pre-Series B .” That’s in addition to a $192 million effort by the Energy Department to support battery recycling technology in the U.S., with the aim of limiting U.S. dependence on Chinese-made batteries.
The recent influx of deals is reminiscent of 2021’s climate tech financing frenzy, but according to data from PitchBook, global venture capital funding for battery recycling companies is still far from the peak of a few years ago. In the third quarter of 2021, PitchBook tracked $2.5 billion in financing across nine deals. In the same quarter of this year (with a few weeks to go), the data company recorded $1.5 billion in funding for seven deals.