Grinergy Bridge Round Funding
Ascendo Ventures participates in the bridge round funding of Grinergy, a battery company developing LTO (lithium titanate) cathode technology electric vehicle batteries with superior performance and safety compared to conventional lithium batteries.
Grinergy marks Ascendo Ventures’ first materials-based technology investment, an area we focus less on compared to our investments in IT/software-focused startups. We previously invested in the company with the our first fund, the Ascendo Genesis Fund, which enables us to acquire shares of angel investors.
In recent times the battery industry has rapidly trended upwards which has been particularly evidenced in the public markets. In addition to the recently listed LG Energy Solutions, there are several large publicly-listed companies deeply entrenched in the battery industry value chain and also receiving considerable attention, such as SK affiliates, Samsung SDI affiliates, and EcoPro affiliates. In my personal academic and work experience, the lifecycle to success in the area of materials requires significant time and is filled with ups and downs on the journey from “zero to one”. In addition, many companies in the materials industry characteristically developed out of the public eye and with a heavy priority on research and development prior to commercialization. As such, most investors tend to favor investing in businesses that have meaningful financial performance or have won production orders for their products. This is reflected similarly in biotech, but the impact in terms of potential return on investment is different. Consequently, it seems that there is a limitation as to the depth and number of investors who focus on this space.
In spite of this, the battery sector is an exception particularly with the advent of the electric vehicle era. Batteries currently account for more than 30% of electric vehicle manufacturing costs, and I have given much attention to the sector given the overall view that significant technological progress is still necessary to continue improving efficiency and lower the cost structure. With this as a backdrop, Grinergy was a logical choice because it possesses the technical barriers to entry as a pain killer solving the problems of current NMC (Lithium, Nickel, Cobalt, Manganese) lithium ion batteries such as low-high temperature performance, charging/discharging life cycles, and low power output. Though some predict that solid-state batteries could be commercialized by 2030, at times it seems its development progress is regressing. LG said it would produce iron phosphate batteries, which have always been pointed out in terms of energy density but have been a good solution in terms of safety, overcoming technical limitations by replacing graphite with LTO electrodes. As such, the opportunity in investing in Grinergy was clear, given their gel-type electrolyte patented technology and a clear path to the solid-state battery market.
Although it may not be able to directly replace NMC type batteries, which is a major technology currently in use, there is a clear potential for Grinergy’s LTO technology in the form of MNC batteries or in hybrids. In the future, we are bullish that Grinergy batteries can be widely used in areas such as defense and infrastructure, which require stability and low-temperature operational stability, and we are hopeful that executives with R&D experience at the biggest players such as Apple, Tesla and Samsung, will catch these market opportunities.
