Redwood attracts Google for its $425M Series E as AI power needs rise

Redwood Materials has successfully attracted Google as a new investor in its recent Series E funding round, which has now reached a remarkable $425 million. This investment comes as the startup, known for its battery recycling and cathode production, expands its efforts to support energy storage solutions for AI data centers and various industrial operations. Founded by former Tesla Chief Technology Officer JB Straubel in 2017, Redwood originally focused on establishing a circular supply chain for batteries. The company began by recycling scrap materials from battery production and consumer electronics, such as cell phone and laptop batteries. It processes this scrap to extract valuable materials, including nickel and lithium, which are then supplied to major clients like Panasonic for battery manufacturing. The Series E round, which initially raised $350 million last October with backing from venture capital firm Eclipse, has seen increasing interest from additional investors. Among these are Nvidia’s investment branch, NVentures, alongside returning stakeholders like Capricorn and Goldman Sachs. Although Redwood did not disclose its current valuation, sources indicate that it exceeds $6 billion, reflecting a significant increase from its previous valuation. This latest influx of funding brings Redwood’s total capital raised to an impressive $4.9 billion. The shift towards energy storage is particularly appealing to investors like Google and Nvidia, especially as demand for data centers continues to surge. Redwood has expanded its operations beyond recycling by launching an energy-storage division last summer, repurposing electric vehicle batteries that are not yet ready for recycling into micro-grids capable of supplying power to data centers and large industries. As electricity consumption rises due to AI advancements and electrification efforts, Redwood emphasizes the critical need for robust energy storage infrastructure. According to the company, it recovers over 70% of discarded battery packs in North America, many of which hold potential as energy storage solutions. With plans to deploy 20 gigawatt-hours of grid-scale storage by 2028, Redwood is poised to play a significant role in powering a growing number of data centers and industrial sites.