(Bloomberg) — Swedish battery maker Northvolt AB raised $2.75 billion in its biggest financing round yet to help pay for extra production capacity and underpin its leading role in Europe.
The supplier to manufacturers including Volkswagen AG and BMW AG announced the private placement on Wednesday. It was co-led by Swedish pension funds AP1, AP2, AP3, AP4 and Omers Capital Markets, alongside existing investors Goldman Sachs Asset Management and VW Group.
The company, which was founded by former executives from Tesla Inc., currently leads European efforts to build a domestic supply chain for lithium-ion batteries. As other projects in the region gather pace, Northvolt has targeted reaching a 25% share of the European market by 2030.
Volkswagen, which aside from being a customer is also a shareholder in Northvolt, contributed $620 million to the financing round, it said in a statement. The capital injection allows it to maintain a roughly 20% stake in the Swedish company.
ATP, Denmark’s biggest pension fund, said it added 900 million kroner ($147 million) to an existing investment, bringing the total to 1.5 billion kroner. Its chief executive, Bo Foged, said ATP’s involvement in Northvolt the past two years “has obviously not been without risk, but Northvolt breathes sustainability into the entire value chain and that fits perfectly with our own ambition.”
The funds raised in the latest financing round will be used to expand annual capacity at the Northvolt Ett factory in Skelleftea, Sweden, to 60 gigawatt hours, from an earlier target of 40 GWh.
“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,” Northvolt CEO Peter Carlsson said in the statement.
The Skelleftea plant will be the company’s first large-scale manufacturing facility, churning out cells by the end of this year.
Northvolt currently has contracts worth about $27 billion with customers including VW, BMW and Scania, which are planning to purchase its batteries, according to ATP.
(Adds investor comments from fourth paragraph)
More stories like this are available on bloomberg.com
Subscribe now to stay ahead with the most trusted business news source.
©2021 Bloomberg L.P.
