Northvolt Raises $600M for Battery Gigafactory Expansion

October 29, 2020 by Shannon Cuthrell

Swedish battery manufacturer Northvolt secures $600 million round to expand its battery production and recycling capacity in Europe.

Swedish battery manufacturer Northvolt AB recently announced a $600 million equity fundraise to support its R&D and manufacturing activities. 

Northvolt, based in Stockholm, manufactures lithium-ion battery cells and systems for the automotive, grid, industrial and portable equipment markets. According to Northvolt’s website, the company’s partners include ABB, BMW, Siemens, Volkswagen, and other leading industry players.


Site of the Northvolt Ett gigafactory in Skellefteå, Sweden. (Photo source: Northvolt via Twitter)
Site of the Northvolt Ett gigafactory in Skellefteå, Sweden. (Photo source: Northvolt via Twitter)


Broadly, Northvolt's announcement stated that the new capital would help the company achieve its goal of reaching 150 Gigawatt hours of annual manufacturing output in Europe over the next decade. 

Funds will be allocated towards the “Northvolt Ett” lithium-ion gigafactory in Skellefteå, Sweden. The giga-scale facility will be capable of recycling lithium, cobalt, nickel and other metals, and 50% of production would be sourced by raw material from recycled batteries. Construction is currently underway, with production slated to begin in 2021. 

Northvolt also plans to use the funds to expand its existing R&D facility in Västerås, Sweden. The R&D hub, dubbed “Northvolt Labs Campus,” is expected to double in size in the coming years, the announcement stated. 

Several institutional investors contributed to the $600 million round, including U.K. investment firms Bridford Investments Limited and Baillie Gifford, Switzerland-based PCS Holding, Baron Capital Group in New York, and Swedish venture capital fund Norrsken VC. Two prominent individual investors also participated: Daniel Ek, founder and CEO of Spotify, and Cristina Stenbeck, owner of Swedish investment firm Kinnevik AB. 

Northvolt’s existing investors, including Goldman Sachs, IMAS Foundation, Scania and Volkswagen AG, also participated in the round. 

The new investment round brings Northvolt’s total funding to $3.3 billion, according to Crunchbase. The news comes after Northvolt raised $1.6 billion in debt financing in July 2020, funded by commercial banks, pension funds and public financial institutions. In June 2019, the company secured $1 billion in equity and debt financing, bringing its total valuation to $1.6 billion.

Separate from the gigafactory development in Sweden, Northvolt is currently in the permitting phase of building a lithium-ion battery production facility in Salzgitter, Germany, with operations expected to begin in 2024. The project, announced in 2019, formed through a joint venture between Northvolt and Volkswagen. The German automaker invested around $1 billion in Northvolt last year.