Home / Business / Spotify’s CEO backs Tesla rival Northvolt in a $ 600 million funding round

Spotify’s CEO backs Tesla rival Northvolt in a $ 600 million funding round

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LONDON – Daniel Ek, founder and CEO of Spotify, has invested in the Swedish battery company Northvolt, which is building a Gigafactory in the Swedish Lapland region.

Stockholm-based Northvolt announced Tuesday that it has raised $ 600 million in equity financing from Ek, Swedish entrepreneur Cristina Stenbeck and institutional investors such as Baillie Gifford, Baron Capital Group, Bridford Investments Limited, Norrsken VC and PCS Holding. The current shareholders of Northvolt, Goldman Sachs Merchant Banking Division, IMAS Foundation, Scania and Volkswagen also participated in the financing round.

The investment in Tesla̵

7;s rival comes less than a week after Ek pledged to invest 1 billion euros ($ 1.2 billion) of his wealth in “moonshot” bets in Europe. According to Forbes, Ek is worth $ 3.7 billion, which indicates that it is allocating about a third of its wealth to finance European technology.

“I want to do my part, we all know that one of the biggest challenges is access to capital,” Ek said, adding that he wanted to realize a “new European dream”.

“I get really frustrated when I see European entrepreneurs giving up their fantastic visions of selling to non-European companies soon, or when some of Europe’s most promising tech talent leave because they don’t feel appreciated here,” Ek told the tech conference. Slush last Thursday. “We need more excellent companies that raise the bar and can serve as inspiration.”

Founded in 2016, Northvolt aims to develop the world’s most environmentally friendly lithium-ion battery. The company, founded by two former Tesla executives, sees its batteries used to power new electric cars built by some of Europe’s largest auto makers.

Construction of a Gigafactory is underway to produce the batteries in Skelleftea in northern Sweden and plans to start production in 2021.

The company, which already employs around 800 people, said it will use the new funding to increase the number of cells and battery systems it can produce. It will also use the money to double the size of its labs and create a “giant-scale recycling plant” capable of recycling lithium as well as cobalt, nickel, manganese and other metals.

“We are in the midst of a race to establish manufacturing capacity in Europe, and I believe that companies that are best at attracting talent and capital, while scaling their projects the fastest, will be the most successful,” he said Peter Carlsson, co-founder and CEO of Northvolt, in a statement.

“With these world-class partners behind us, we have created a solid foundation to move forward and execute our plans to enable large-scale production of green batteries in Europe.”

Northvolt is also seeking permission to create a second Gigafactory facility in Salzgitter, Germany, and expects operations to begin in 2024.

Last June, Northvolt raised $ 1 billion from Volkswagen, BMW and others.

In July, it announced it had raised $ 1.6 billion in debt through a consortium of commercial banks, pension funds and public financial institutions. This included a $ 350 million loan from the European Investment Bank, which is a publicly owned institution whose shareholders are EU member states.

Also in July, BMW signed a € 2 billion battery cell contract with Northvolt that will see Nortvolt’s batteries used in its upcoming electric cars.

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