Redwood Materials, a Nevada-based battery recycling and energy storage company founded by former Tesla executive JB Straubel, has completed the final close of its Series E funding round, bringing the total raised in the round to $425 million. The company said the capital will support efforts to supply power solutions for AI data centres and large industrial sites, as electricity demand rises across computing, manufacturing, and electrification.
The round includes continued backing from existing investors Capricorn and Goldman Sachs Alternatives, and adds Google as a new investor. Strong demand from investors pushed the raise beyond the $350 million the company had announced previously.
Redwood Materials did not disclose its valuation. However, a person familiar with the financing told reporters the company’s post-money valuation is above $6 billion, representing an increase from its prior round. With the Series E final close, Redwood’s total private funding now stands at roughly $2.3 billion.
From recycling to a broader battery “circular supply chain”
Founded in 2017, Redwood Materials set out to build a domestic, circular supply chain for batteries—recovering valuable materials and feeding them back into manufacturing. In its early years, the company focused on recycling scrap from battery manufacturing and consumer electronics, extracting and refining materials such as lithium and nickel. Those recovered inputs were then supplied to battery makers including Panasonic, according to the company’s prior disclosures.
Over time, Redwood expanded beyond recycling. The company added cathode production capabilities and, more recently, launched an energy storage business designed to give used electric-vehicle batteries a second life. That shift reflects a broader trend in the battery industry: as EV adoption grows, so does the volume of used packs that still retain enough capacity for stationary storage applications.
Second-life batteries aimed at AI-era power needs
Redwood’s newer energy storage platform repurposes used EV batteries into microgrids that can provide power for AI data centres and large industrial customers. The company has positioned this business as a way to address rising demand for reliable electricity as AI computing expands and industrial electrification accelerates.
Data centres, particularly those supporting AI workloads, are increasingly scrutinized for their power consumption and grid impact. At the same time, factories and other industrial facilities are seeking resilience against outages and volatility in energy supply. In that environment, large-scale storage—whether from new batteries or repurposed units—has become a strategic asset, helping operators smooth peak demand, manage intermittency, and add backup capability.
According to the company, it recovers more than 70% of used or discarded battery packs in North America, and says many of those packs are suitable for reuse in stationary storage. Redwood previously said it had more than 1 gigawatt-hour of batteries in inventory, with additional supply expected, and has set a goal to deploy 20 gigawatt-hours of grid-scale storage by 2028.
Investor interest shifts toward infrastructure-like growth
While battery recycling remains central to Redwood’s mission, the energy storage business appears to be an increasingly important draw for investors. The pitch is straightforward: as AI, electrification, and manufacturing expand, the grid needs more flexible capacity, and storage can act as a bridge—supporting reliability while new generation and transmission projects catch up.
By combining recycling, materials processing, and second-life storage, Redwood Materials is betting that a vertically integrated approach can lower costs, reduce supply risk, and create multiple revenue streams across the battery lifecycle.
How Redwood says it will use the new capital
Redwood said the Series E proceeds will be used to scale both its energy storage platform and its recycling and critical minerals operations—part of what it describes as building a domestic battery ecosystem in the United States.
In a company statement, Redwood framed the round as support for the next phase of power infrastructure development. “Together, these investments position Redwood to lead grid reliability, energy security, and the next phase of modern power infrastructure. We are deploying capital with discipline and relentlessly focused on execution as we continue scaling our domestic battery ecosystem,” the company said.
What to watch next
The close of the Series E round sets up several near-term questions for the company and the broader market. First is execution: scaling microgrids and grid-scale storage requires not only a steady supply of suitable used packs, but also standardized testing, refurbishment, safety controls, and customer deployment capabilities. Second is how quickly demand from AI data centres translates into long-term contracts, which could help stabilize revenue and justify further expansion.
Finally, the participation of Google is likely to be closely watched. While Redwood has not detailed the nature of Google’s involvement beyond investment, the addition of a hyperscale technology company underscores the growing intersection between climate tech, energy infrastructure, and AI-driven computing growth.
For Redwood, the bet is that the battery lifecycle—recycling, materials recovery, and reuse—can become a cornerstone of a more resilient, domestic energy system at a moment when power demand is rising faster than many grids were built to handle.
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