Institutional investors fund development of disruptive anode Metal Tech News – February 3, 2021
Considered by market experts to be the largest single fundraising in the history of lithium-ion battery supply chains, Sila Nanotechnologies raised US$590 million during a financing that closed on Jan. 26.
"Raising way over half a billion dollars is an incredible achievement but is exactly the level of investment innovators in the battery supply chain should be receiving," said Benchmark Mineral Intelligence Managing Director Simon Moores.
Aptly located in Silicon Valley, Sila Nano has developed a silicon-based anode battery technology that is expected to enable lighter, safer, and higher energy density batteries for electric vehicles, longer-lasting portable electronics, and broader use of renewable energy.
Many institutional investors, which are convinced that this battery materials technology developed by the Alameda, California-based company will be a game changer for the electrical storage industry, backed the enormous financing to be used to start development of a 100 gigawatt-hour battery plant to serve automotive customers.
Coatue Management LLC, a global technology-focused investment firm, led the more than half-a-billion-dollar financing with significant backing by funds and accounts advised by T. Rowe Price Associates Inc. In addition, existing Sila Nano investors 8VC, Bessemer Venture Partners, Canada Pension Plan Investment Board, and Sutter Hill Ventures participated in the record battery financing.
"We believe Sila Nano has created a battery technology that is new, groundbreaking, and has a clear path to scale and broad adoption," said Jaimin Rangwalla, senior managing director at Coatue Management.
Utilizing the second-most abundant element on earth, Sila Nano says its current silicon-based anode offers a 20% improvement over state-of-the-art traditional lithium-ion batteries with graphite anodes, in terms of energy density, with the potential to reach 50% improvement over time.
Higher energy density equates to the need for less battery cells, which improves the performance and lowers the costs of electric vehicles and other products they go into.
While lowering costs and increasing performance could be the disruptive technologies needed for mass adoption of EVs, what really has investors excited is Sila Nano has developed its product in such a way that they will not disrupt the manufacturing process in the hundreds of battery factories springing up around the globe.
This is because the company's product can be dropped into existing battery making processes, which means that automakers and consumer product manufacturers can continue working with existing battery suppliers and seamlessly incorporate Sila Nano's materials technology into new products when the time is right.
"We are excited about the Sila Nano team's opportunity to take advantage of the existing global lithium-ion manufacturing infrastructure and help transform the future of energy storage," said Rangwalla.
Driven by the mass adoption of electric vehicles, lithium battery storage capacity is expected to skyrocket in the coming decade.
Benchmark Mineral Intelligence, the global authority on lithium-ion battery supply chains, is tracking 186 battery manufacturing factories in the pipeline around the world with the capacity to produce 3.1 terawatt-hours of lithium-ion battery storage capacity per year by 2030, which is a 1,250% increase over the 250 GWh produced in 2020.
Moores, which founded Benchmark, said the enormous fundraising by Sila Nano "shows big institutional investors are beginning to understand the importance of the midstream of the battery supply chain and opportunities in developing anode technology, which has been neglected to date."
Sila Nano will use the US$590 million it raised to start development of a North American 100 GWh plant to produce its silicon-based anode material.
"It took eight years and 35,000 iterations to create a new battery chemistry, but that was just step one," said Sila Nanotechnologies CEO Gene Berdichevsky. "For any new technology to make an impact in the real-world, it has to scale, which will cost billions of dollars."
The Silicon Valley company, which already has partnerships with automakers BMW and Daimler, aims to start production at the new plant in 2024.
"We know from our experience building our production lines in Alameda that investing in our next plant today will keep us on track to be powering cars and hundreds of millions of consumer devices by 2025," Berdichevsky added.