Battery Recycler Redwood Materials Secures $350M to Expand Energy Storage for AI Data Centers

Major Funding Round for Battery and Energy Storage Expansion

Battery recycling and materials firm Redwood Materials has raised $350 million in a Series E funding round, according to reports from TechCrunch. The investment, led by venture firm Eclipse with participation from Nvidia’s venture arm NVentures, will support the company’s expansion into energy storage and scaling of its cathode and battery material production. Sources indicate the company’s valuation reached approximately $6 billion, a notable increase from prior estimates.

Major Funding Round for Battery and Energy Storage Expansion
Strategic Focus on AI Data Center Power Needs
Circular Supply Chain and Market Position
Substantial Battery Inventory and Future Goals
Investment and Industry Implications

Strategic Focus on AI Data Center Power Needs

Redwood Materials is channeling resources into its new energy storage division, Redwood Energy, which aims to address the surging electricity demands of AI data centers and industrial sites. The company reportedly uses retired electric vehicle batteries, which still hold significant capacity, to build off-grid power systems. These systems can integrate with renewable sources like wind and solar, and analysts suggest they may also connect to natural gas or future nuclear generators for reliable, large-scale energy storage.

Circular Supply Chain and Market Position

Founded in 2017 by former Tesla CTO JB Straubel, Redwood originally focused on creating a circular supply chain by recycling scrap from battery production and consumer electronics. The report states that the company recovers key materials such as lithium, cobalt, and nickel and supplies them to partners like Panasonic, GM, and Toyota. With the addition of cathode production and energy storage, Redwood has expanded its role in the sustainable energy ecosystem.

Substantial Battery Inventory and Future Goals

Redwood Materials has accumulated a significant inventory of used EV batteries, reportedly over 1 gigawatt-hour in stored capacity as of June. The company plans to deploy 20 gigawatt-hours of grid-scale storage by 2028, positioning it to become the largest repurposer of retired EV battery packs in North America. This effort supports both sustainability goals and the growing need for dependable power for energy-intensive applications like artificial intelligence.

Investment and Industry Implications

The involvement of NVentures, Nvidia’s investment division, highlights the strategic importance of reliable energy storage for the tech and AI sectors. The $350 million raised will reportedly be used to hire additional engineers and operational staff and to enhance refining and material production capabilities. This funding round underscores increasing investor confidence in circular economy models and clean energy infrastructure to power next-generation technologies., according to market trends

References

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