Battery materials startup Group14 announced on Wednesday that it has closed a $463 million funding round to expand its manufacturing footprint. This significant investment is a sign that investors remain confident in the future of electric vehicles.
The startup manufactures silicon anode materials, which significantly boost the storage capacity of lithium-ion batteries. Group14 currently operates three factories, with two located in the United States and one in South Korea.
Despite headlines about softening demand growth for electric vehicles, the global market for lithium-ion batteries remains strong. Over the next decade, it is expected to grow more than 15% annually, quintupling in size according to Precedence Research. Automakers and investors continue to pursue companies working on technology that will make electric vehicles more efficient and affordable.
This funding round was led by battery manufacturer SK, with participation from ATL, Lightrock, Microsoft, Porsche, and OMERS. Alongside the round, Group14 also announced it had acquired full ownership of a joint venture with SK in South Korea, which includes its BAM 3 factory. SK had previously owned 75% of the joint venture. The company is not disclosing whether the value of this transaction was included in the Series D total.
Silicon has long been targeted as a potential replacement for graphite, the current go-to anode material, because it can hold up to ten times more electrons. However, pure silicon anodes have a tendency to crumble with every charge and discharge as the material expands and contracts, a problem graphite is more resistant to.
Startups like Group14 and its competitor Sila have accommodated silicon’s propensity to swell by creating structures that keep the silicon in place without sacrificing the anode’s overall integrity. Group14’s material is a scaffold with internal voids that hold the silicon, giving it room to expand.
This material can be blended with graphite or replace it entirely. Many companies still opt for blending because of graphite’s inherent stability. However, the more silicon used, the more energy a single cell can store. Group14 says its material can improve energy density by up to 50% and cut fast-charging times to below 10 minutes.