BlackRock and Temasek fund backs battery startup in $542M round

Battery materials and recycling company Ascend Elements has raised $542 million in a deal co-led by a new growth fund from BlackRock and Temasek.

Why it matters: Investors are pouring money into building a domestic supply chain for EV batteries, spurred by Inflation Reduction Act dollars and funding from corporations.

Details: The round was co-led by the Temasek-BlackRock fund (Decarbonization Partners), along with Qatar Investment Authority and Temasek independently.

• Massachusetts-based Ascend will use the funds to build a factory in Hopkinsville, Ky., which will make cathode battery materials using recycled battery sources.
• Ascend says it just signed a $1 billion agreement to sell its battery materials to "a major U.S. customer" starting in the fourth quarter of this year.

Big picture: The Biden administration has been amassing federal support through the IRA for a U.S. battery materials supply chain including manufacturing, mining, materials processing and recycling.

• Private funding is now following the signal of government support, and companies across the supply chain have announced new battery factories, lithium mines, parts facilities and recycling plants.
• Ascend Elements' fundraising follows news last week that Redwood Materials has closed an equity round of more than $1 billion to expand its battery recycling and materials capacity. Redwood also secured a $2 billion loan commitment from the Department of Energy,

• Recycled battery materials will play a key role in the ecosystem as the supply of new materials like lithium are dominated by global players like China. The U.S. only has a tiny piece of the new battery materials production market.