Venture capital rolls in for EV battery startups

A key development in the global EV industry’s advancement last year was a striking rise in venture capital for EV battery startups, which indicates an upward graph for the trend in 2022 both within and beyond India.

Globally speaking, 2021 saw EV battery startups raising over $3.6 billion through funding rounds led by big names in the auto industry: For instance, Massachusetts firm SES secured $139 million for the further development of its hybrid lithium metal battery in a Series D round led by car giant General Motors; Colorado-based solid-state battery-maker Solid Power raised a $130 million Series B led by Ford Motor, BMW Group and Volta Energy Technologies. Additionally, Singapore’s charging infrastructure provider Oyika closed a $100 million venture round.

All in all, global VC investment in EV startups topped $17.8 billion in 2021, blowing past the previous year’s total of $10.6 billion, according to PitchBook data. Some of the largest funding rounds went to vehicle manufacturers like Rivan and China’s Weltmeister. But increasingly, the spoils were shared by startups that aim to support electric vehicle adoption in other ways, such as battery makers Svolt and Sila Nanotechnologies.

The Indian EV industry, in particular, experienced a similar outpouring of monetary support for battery-makers from venture investors: EV battery swapping network Battery Smart raised USD 7 million in a pre-Series A round from a clutch of investors of Blume Ventures and Orios Ventures. Bengaluru-headquartered advanced battery-tech and deep-tech start-up Log 9 Materials closed its Series A+ capital raise round of $10 million, in which $2 million were invested by PETRONAS Ventures. Additionally, Lohum Cleantech, a New Delhi-based startup that manufactures and recycles electric vehicle batteries, raised USD7 million in a round of funding led by Baring Private Equity Partners (BPEP).

As for 2022, so far the venture capital well for EV battery startups seems to be far from running dry. Three important deals worldwide raised almost $290 million, including battery-maker Factorial Energy raising $200 million as part of a Series D round led by Mercedes-Benz and Stellantis. Further, Silicon Valley-based KoBold Metals, a start-up backed by a coalition of billionaires including Bill Gates and Jeff Bezos, has raised more than $190 million in its latest Series B funding round. The firm will use the funds to find new deposits of critical metals that are required for EV batteries and clean energy.

Last month alone saw several such funding rounds closing successfully. For instance, Capital A, a venture fund for seed to early-stage startups, announced the launch of ‘Evolve’, a $10 million cleantech fund to further India’s electric vehicles (EV) ecosystem. The fund will back early-stage startups developing electric vehicles (EV), EV batteries, battery management systems, battery-as-a-service, and charging startups.

Additionally, Chargeup, the company hoping to build one of India’s largest battery-swapping network for electric two and three-wheelers, announced that it has raised USD 2.5 million in pre-Series A round led by Capital-A and Anicut Capital. The fund launch followed Finance Minister Nirmala Sitharaman’s announcement of the government’s plans to develop a battery-swapping policy during the Budget 2022-23 speech.