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