Capital Raise for Silicon Battery Tech

In late January 2021, Sila Nanotechnologies completed yet another round of financing in its quest to bring silicon battery technologies to the market.  The company raised $590 million in an unusual Series F funding round.  The usual suspects participated, including Sutter Hill Ventures, 8VC, Bessemer Venture Partners.  The round implied a valuation of $3.3 billion, a staggering girth for a company that is still in a developmental stage.  Zoom Info suggests Sila Nanotechnologies has achieved as much as $50 million annual revenue from sales of its early battery technologies for consumer electronics products.

The new money will help build a 100 gigawatt hour factory for batteries that will feature Sila Nano’s new battery chemistry.  Management has aspirations to produce materials for as much as 30,000 gigawatt hours in battery power per year by 2050 to sell to the smart phone and electric vehicle markets. Sila Nano is not the usual lithium ion ‘wanna be.’

The company’s engineers have worked for nearly a decade on a silicon-base anode that will replace graphite-based anodes.  Even as an expensive material, silicon is attractive as an anode material because it can store many more lithium ions from the electrolyte that moves the ions back and forth in the battery charge and discharge cycles.  This means greater energy density and therefore better battery performance that lets electric car drivers go farther and faster. 

Unfortunately, silicon has its problems.  The material has a vexing tendency to expand and shrink during charge and discharge cycles.  This can cause cracks in the anode and then battery failure.  Sila Nano has worked around problem and has even figured out how to substitute its silicon anodes into existing battery manufacturing processes.  Battery manufacturers are getting the promise of better battery performance without have to incur huge capital expenses to retool manufacturing lines.

Daimler AG was one of the participants in Sila Nano’s Series E financing round and has been considered one of the most likely first adopters for the new silicon anodes.  In October 2020, Mercedes-Benz announced  intentions to bring new leadership to the electric car market.  The company announced a new strategic plan for expansion in the luxury car segment and plans for four new all-electric vehicles that will reach customers beginning in 2021.  The announcement also laid out plans for new battery technologies developed in cooperation with several partners and mentioned Sila Nano by name.

The real potential in the company is still ahead and most likely with the electric vehicle market.  Investors are well advised to watch this company closely for news of its first silicon anode production sometime in 2024 and then of customer orders beginning in 2024.  It seems logical that the investors in its many venture rounds will want to realize returns through an initial public offering. 

 

 

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.