Volkswagen has co-led a $1bn debt and equity round for Sweden-based advanced battery developer Northvolt that included fellow carmaker BMW and insurance group Folksam.
The round was co-led by investment bank Goldman Sachs’ Merchant Banking Division and included pension manager AMF and Imas Foundation, the sister entity of Ingkea Foundation, the owner of home furniture chain Ikea’s retail outlets.
Volkswagen will take a 20% stake in Northvolt through the deal, which values the company at $1.56bn post-money according to Nordic9, and will commit a total of $1bn to joint battery activity that will include joint construction of a battery production facility.
Founded in 2016 as SGF Energy, Northvolt has developed lithium-ion batteries for use in the automotive and industrial spaces in addition to grid-scale energy storage.
The funding will support work on the company’s first lithium-ion battery cell production plant, which will have 16GWh of manufacturing capacity. Construction is due to commence in August 2019 with full-scale production anticipated by 2021.
The European Union-owned European Investment Bank has approved a $400m loan for the company that will support work on the factory and which was included in the latest round. Volkswagen will collaborate on a second 16GWh plant slated to be built by 2024 and is taking a seat on Northvolt’s board of directors.
Northvolt had previously received nearly $90m in equity and project financing according to Nordic9, including $560,000 from power producer Vattenfall in March 2017 before the company supplied a further $13.7m in January 2019.
Wind turbine manufacturer Vestas invested $11.2m in December 2017, before industrial technology group Siemens provided $11.6m in April 2018 and energy utility Skellefteå Kraft invested $11.8m the following month.
Commercial vehicle producer Scania invested another $11.4m through a partnership deal agreed with Northvolt in January this year.