Redwood Materials raises $550M to power AI data centres, hitting $7B valuation
What's the deal? Redwood Materials has raised $550 million in a late-stage round, valuing the battery recycling and storage company at more than $7 billion. Founded by Tesla co-founder JB Straubel, it plans to scale its energy storage business for AI data centres.
What's the endgame? Redwood started by recycling end-of-life lithium-ion batteries and recovering lithium, nickel, and cobalt. As electric vehicle demand slowed, it moved into battery manufacturing and stationary storage, repurposing used EV batteries that still hold usable capacity into large-scale systems for data centres.
Why now? Technology companies are investing billions in hyperscale data centres, driving demand for backup power, grid resilience, and uninterrupted electricity. Battery storage is emerging as a fast-growing market even as EV demand cools.
The new capital follows an earlier round that valued Redwood at over $6 billion, backed by Google parent AlphabetDealroom has a profile for this one. Try Dealroom → and Nvidia's venture arm. The company's strategy centres on giving retired EV batteries a second life before recycling, extending their use while creating an additional revenue stream.
By the numbers: The round lands in the 99th percentile of all-time late-stage VC deals in US energy, based on a sample of 618 rounds — a marker of how much capital is flowing into infrastructure supporting the AI boom.
The signal: Energy availability is becoming a defining constraint on AI deployment. As utilities struggle to keep pace with data centre expansion, companies offering sustainable storage are positioning themselves at the centre of the AI infrastructure race.
Read more: martechai.com
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