US-based lithium extraction technology developer Lilac Solutions closed a $150m series B round, which included industrial gas producer SK Materials, conglomerate Sumitomo Corporation and BMW i Ventures, the venture capital firm formed by automotive manufacturer BMW. Sumitomo was represented by its Presidio Ventures unit. The round was co-led by Lowercarbon Capital and accounts advised by T Rowe Price, featuring also MCJ Collective, Earthshot Ventures, commodity trading firm Mercuria Energy Trading, The Engine, Valor Equity Partners and Breakthrough Energy Ventures.
Founded in 2016, Lilac has developed ion exchange technology which helps ramp up lithium mining from brine sources as an alternative to the conventional production methods that have a lower yield and a more negative impact on the environment. The company intends to use the fresh funding to increase production of the company’s ion exchange beads and hire engineers and field operators as it looks to expand its presence globally.
Lilac is part of the broader mining tech space, which appears to have been somewhat surprisingly neglected by corporate venture investors, at least based on deals they have disclosed and publicised. As our GCV Analytics bar chart below illustrates, the number of deals in the broader mining tech space have been few and far between over the past decade, without forming any clearly identifiable trend. This is somewhat surprising, given that any vision of a low carbon future with renewable energy sources taking over fossil fuels and electric vehicles being massively adopted, is not plausible without harnessing significant quantities of copper, lithium and rare earth metals. The prices of these commodities had hardly reflected this either until the recent monetary intervention of central banks, which weakened the US dollar. Some argue that we may be entering into a new commodities supercycle, whereas others believe this is a transitory effect of supply chain disruptions due to the shock from the covid-19 pandemic. We may be likely to see more such deals in this space going forward.
