Automotive manufacturer Volkswagen invested $620m to co-lead a $2.75bn private placement today for Sweden-headquartered battery producer Northvolt that also featured commercial vehicle producer Scania.
The round was co-led by investment bank Goldman Sachs’ Asset Management subsidiary, pension funds AP1, AP2, AP3, AP4 and Omers Capital Markets, a vehicle for pension fund manager Omers.
AMF, ATP, Baillie Gifford, Baron Capital Group, Bridford Investments, Compagnia di San Paolo, Imas Foundation, EIT InnoEnergy, Norrsken VC, PCS Holding, Stena Metall Finans and private investors Cristina Stenbeck and Daniel Ek completed the investor list.
Northvolt manufactures lithium-ion batteries for use in electric vehicles in addition to portable electronics products such as drones, and the storage of renewable energy.
The financing will support the expansion of the company’s Gigafactory from a capacity of 40 GWh per year to 60 GWh per year. It is considering building another two facilities by 2030 to handle a projected increase in demand.
Goldman Sachs Bank Europe and Morgan Stanley International advised Northvolt on the round, which boosted its overall debt and equity financing to $6.5bn. Volkswagen’s stake is sized at about 20%.
The company had raised a total of about $90m in equity and project financing through early 2019. Energy utility Vattenfall invested $560,000 in 2017 before wind turbine producer Vestas added $11.2m later that year.
Industrial technology and appliance manufacturer Siemens supplied $11.6m for Northvolt in 2018 and energy utility Skellefteå Kraft invested $11.8m later the same year. It raised $13.7m from Vattenfall in January 2019 and Scania invested $11.4m the same month through a partnership agreement.
Volkswagen and Goldman Sachs’ Merchant Banking Division co-led a $1bn debt and equity round for the company in June 2019 that also featured insurance firm Folksam, automotive manufacturer BMW, AMF and Imas Foundation.
Volkswagen, Baillie Gifford and Goldman Sachs’ Merchant Banking Division co-led a $600m round for Northvolt in October 2020 that included Scania, Baron Capital, Bridford Investments, Norrsken VC, PCS Holding, Imas Foundation, Cristina Stenbeck and Daniel Ek.
Peter Carlsson, Northvolt’s chief executive, said: “We have a solid base of world-class investors and customers on board who share Northvolt’s mission of building the world’s greenest battery to enable the European transition to renewable energy.”
Thomas Schmall, CEO of Volkswagen Group Components, added: “Batteries are one of the key success factors in our unprecedented electric offensive. In the major area of green battery cells, we are assuming a pioneering role in Germany and Europe together.”
Image courtesy of Northvolt AB.
