Northvolt secured $1 billion in financing, gets a $1.6bn valuation.

Denmark Sweden Investments 12 June 2019
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Northvolt, a Swedish-based company working to launch an electric battery factory, announced the agreement of a $1 billion in financing.

The amount is part equity part debt, secured from various international strategic investors and financial institutions. The debt/equity specific numbers were not disclosed.

The equity round was led by Volkswagen Group and Goldman Sachs Merchant Banking Division and included BMW Group, AMF, Folksam Group and IMAS Foundation.

Volkswagen will receive the equivalent of 20% in Northvolt and a place on the board.

The new issue put a company valuation for Northvolt to SEK 14.8 billion ($1.56bn) post money.

The debt financing was covered by the European Investment Bank and additional lenders. The European Investment Bank will contribute with an in-principle $400M (€350) loan as a part of the total funding.

Funding will be used to enable the establishment of the initial 16 GWh of lithium-ion battery cell manufacturing capacity at the gigafactory, Northvolt Ett, in Skellefteå, Sweden. Building construction will commence in August, with large-scale production estimated to begin in 2021.

In cooperation with the Volkswagen Group, the company also announced plans to establish a second gigafactory with an intended location in Lower Saxony, Germany.

Volkswagen is investing around $1 billion in joint battery activities with Northvolt. A part of the amount is intended for the joint venture, another part of the total amount will be invested directly in Northvolt.

After entering a number of supply agreements, a significant share of the production volumes from Northvolt Ett has been sold to key customers, amounting to a combined order value of over $13 billion through 2030.

Northvolt, founded in 2016 by CEO Peter Carlsson, plans to build a next generation battery factory with the aim to produce the world’s greenest batteries to enable and accelerate the transition to renewable energy.

Prior to this deal, the company raised almost $90M in equity financing and stroke strategic deals with industrial companies including Siemens, ABB or Vestas.