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

Google is the latest investor to back Redwood Materials as the battery recycling and cathode maker expands its new energy storage business to power AI data centers and other commercial sites.

Redwood Materials, which was founded by former Tesla CTO JB Straubel, last October earned $350 million around the Series E led by the Eclipse company. The round also included new funding from Nvidia’s venture capital arm, NVentures.

More investors, including newcomer Google, have piled in since then, pushing the Series E to $425 million, the company said. Existing investors Capricorn and Goldman Sachs are also back with new investments.

The company’s valuation has not been disclosed publicly, but a source familiar with the round told TechCrunch that its valuation was north of $6 billion, more than a billion. its original calculation. The latest investment pushes Redwood’s total raised funds to $4.9 billion.

The lure of Google, Nvidia, and others in this latest line appears to be energy storage — and its ability to use data centers — as a new business inside Redwood.

Redwood Tools was founded in 2017 to manufacture battery supply circuits. It initially focused on recycling waste from battery manufacturing and consumer electronics such as cell phone batteries and desktop computers. Redwood’s processes extract and remove elements that are commonly mined, such as nickel and lithium. The newly processed materials are sold to customers such as Panasonic, who use them to make batteries.

Redwood has continued to grow its business beyond renovations. The Carson City, Nevada company added cathode production a few years ago, and last summer, it was launched energy storage business which recycles EV batteries that are not ready for recycling and turns them into micro-grids that can provide power to AI data centers and large industrial facilities.

The new business, called Redwood Energy, began when demand for data centers skyrocketed.

“As electricity becomes more ubiquitous — driven by AI, data centers, manufacturing and electricity generation — energy storage is no longer optional; it’s a necessity,” the company said in a blog post announcing the new investment.

And Redwood seems to have ways to power some of those things. The company said in June it recycles more than 70% of all used or discarded packaging in North America, many of which can have a second life as energy storage.

Redwood said last year it had more than 1 gigawatt-hour in its inventory and expects to receive another 4 gigawatts in the coming months. The company hopes to deploy 20 gigawatt-hours of grid-scale storage by 2028.