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Battery recycling and grid storage firm Redwood Materials has raised a $350 million Series E round led by Eclipse and including Nvidia's VC arm.

Why it matters: Access to electricity is the biggest barrier to the growth of AI. 

Follow the money: Redwood, which was founded by Tesla co-founder JB Straubel, has now raised $2.2 billion in equity.

The company walked away from a $2 billion loan from the Department of Energy last year and never drew down any of the funds.  

Redwood plans to use the Series E to grow its energy storage deployments. 

Catch up quick: This summer Redwood unveiled a new business line, called Redwood Energy, to sell refurbished EV batteries as low cost grid storage projects for uses like powering data centers. 

At the launch event, Straubel said the grid storage business "has the potential to grow faster and to contribute more revenue than the core recycling business." 

Second life grid storage projects can be significantly lower cost than new grid projects, and Redwood has suggested costs of between $100 to $200 per kilowatt hour for its grid batteries, compared to between $200 to $500 per kilowatt hour for new grid batteries. 

To demo the tech, Redwood has installed close to 800 refurbished EV batteries at its Sparks, Nevada headquarters, providing energy for two small modular data centers that were made by Crusoe Energy and host Crusoe's cloud service.

The big picture: Developers of power-hungry AI data centers are interested in batteries paired with solar or to add flexibility and resilience. 

Over the past few years, companies have rushed to sell hyperscalers clean energy and storage projects and grid infrastructure.  

Reality check: Redwood hasn't yet started deliveries of its cathode active material to automotive customers. 

Raising a VC round at this mature stage is also an indicator that the business isn't ready to go public, or able to attract cheaper capital.

What's next: Carson City, Nevada-based Redwood says it could see up to 50% growth in revenue and batteries recycled this year, after generating $200 million in revenue in 2024.

Nvidia backs Redwood Materials' $350M round

Redwood raised $350 million after launching its grid storage business this summer.

A large industrial site in a desert area with hundreds of white covered units arranged in rows, a gray building, and solar panels in the foreground under a clear blue sky.

Second life EV batteries installed next to Redwood Energy's headquarters in Sparks, Nevada. Photo courtesy of Redwood Energy

Battery recycling and grid storage firm Redwood Materials has raised a $350 million Series E round led by Eclipse and including Nvidia&#x27;s VC arm.Why it matters: Access to electricity is the biggest barrier to the growth of AI.

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Nvidia backs Redwood Materials' $350M round

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