Google has joined as the latest investor in Redwood Materials, the battery recycling and cathode production startup. This investment supports the company’s expansion into a new energy storage venture aimed at powering AI data centers and other industrial sites.
Redwood Materials was founded by former Tesla CTO JB Straubel. Last October, the company raised 350 million dollars in a Series E funding round led by the venture firm Eclipse. That round included a new strategic investment from Nvidia’s venture capital arm, NVentures.
Additional investors, including newcomer Google, have since joined the round, bringing the total Series E funding to 425 million dollars. Existing investors Capricorn and Goldman Sachs also participated with fresh investments.
The company’s valuation was not publicly disclosed. However, a source familiar with the round stated its post-money valuation exceeded 6 billion dollars, which is more than a billion higher than its previous valuation. This latest investment brings Redwood’s total capital raised to 4.9 billion dollars.
The attraction for Google, Nvidia, and other investors in this round appears to be energy storage, particularly its application for data centers. This represents a newer business venture for Redwood.
Founded in 2017, Redwood Materials was created to establish a circular supply chain for batteries. It initially focused on recycling scrap from battery production and consumer electronics like cell phones and laptops. The company processes that scrap to extract materials traditionally mined, such as nickel and lithium, and then sells the processed materials to customers like Panasonic for new battery production.
Redwood has continued to expand its operations beyond recycling. The Carson City, Nevada-based company added cathode production several years ago. Then, last summer, it launched an energy storage business. This new division, called Redwood Energy, repurposes electric vehicle batteries that are not yet ready for recycling, turning them into micro-grids to supply power to AI data centers and large-scale industrial sites.
This new business began as demand for data centers skyrocketed. The company stated that with electricity demand surging due to AI, data centers, manufacturing, and electrification, energy storage has become essential infrastructure.
Redwood appears to have significant resources to power some of these data centers. The company reported in June that it recovers more than 70% of all used or discarded battery packs in North America, many of which can have a second life as energy storage.
Last year, Redwood said it had over 1 gigawatt-hour worth of batteries in its inventory and expected to receive another 4 gigawatt-hours in the coming months. The company expects to deploy 20 gigawatt-hours of grid-scale storage by 2028.