Sweden's AP funds lead $2.7bn financing round in Northvolt

Suède
On the 06/09/21 at 10:09AM

by

Adrien Paredes-Vanheule

The money raised by Northvolt will finance further battery cell production capacity and R&D efforts in order to meet increasing demand of customers engaged in the transition to decarbonised, electric solutions.

Northvolt, a Swedish company producing battery cells for electric cars, has secured a $2.75bn (€2.2bn) financing, through a private placement, it stated on Wednesday.

The money raised will serve to finance further battery cell production capacity and R&D efforts in order to meet increasing demand of customers engaged in the transition to decarbonised, electric solutions.

The private placement was co-led by new investors, Swedish public pension schemes AP funds 1-4, via the co-owned company, 4 to 1 Investments, and Omers, a Canadian defined benefit pension plan. Existing investors Goldman Sachs Asset Management and Volkswagen Group also took part to the placement as well as current owners.

These include various institutional players such as AMF, ATP, Baillie Gifford, Baron Capital Group, Bridford Investments, Compagnia di San Paolo through Fondaco Growth, IMAS Foundation, EIT InnoEnergy, Norrsken VC, PCS Holding, Scania and Stena Metall Finans. Spotify's founder and billionaire Daniel Ek as well as Swedish American businesswoman Cristina Stenbeck (Kinnevik) also invested in Northvolt.

Including the private placement, Northvolt has raised in total more than $6.5bn (€5.3bn) in equity and debt. This will support the firm's ambition of reaching beyond 150 GWh of deployed annual production capacity in Europe by 2030.

The Stockholm-headquartered firm seeks to build the world's greenest battery and its plan to achieve this includes establishing recycling capabilities to enable 50 percent of all its raw material requirements to be sourced from recycled batteries by 2030.

In addition, Northvolt will expand its gigafactory in the town of Skellefteå, Sweden, from 40 GWh to 60 GWh of annual production capacity in order to meet demand from key customers, including a $14bn (€11.5bn) order from Volkswagen.

Northvolt currently considers building at least two more gigafactories in Europe over the coming decade and is “actively exploring the opportunity of building the next of these in Germany.”

“This is a new European industry in the making and it will require significant investments over the coming decade. It is encouraging to see that the investor community has identified the opportunity early, and we hope to see more investments throughout the value chain over the coming years,” said Alexander Hartman, CFO of Northvolt.

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