Form Energy Stock and IPO: A Battery Storage Company Transforming the Grid

Bill Gates-backed Form Energy is a buzzy energy storage startup. It claims it can make cheap batteries that don’t need expensive green metals and can store energy for days. Is there a way to invest?

SustainFi   Updated February 25th, 2022

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What is Form Energy?

Renewables like wind and solar are already the cheapest form of electricity in many places. Moving away from fossil fuels to renewables is critical to get to net zero carbon emissions. Yet wind and solar continue to be seasonal and intermittent. That’s why storing energy when wind and solar are plentiful and releasing power back into the grid when they are not is so important. Without energy storage, we can’t fully transition to renewables.

Form Energy is a Somerville, MA-based startup developing low-cost batteries that can store wind and solar power for a long time. The iron-air batteries will store energy for days, sending electricity from wind and solar back into the grid.

The company’s technology was invented at the Massachusetts Institute of Technology (MIT), and the startup was founded in 2017. Co-founder and CEO Mateo Jaramillo previously led Tesla’s energy storage business. Co-founder Yet-Ming Chiang has been a professor at MIT.

The company raised $360 million from investors, including high-profile backers like Bill Gates’s Breakthrough Energy Ventures. Bill Gates even mentions Form Energy on his blog. Amazon’s Jeff Bezos is another investor in Breakthrough Ventures. Form Energy’s partners include ArcelorMittal, a global steel manufacturer, which also invested in the company through its venture fund.

Form Energy’s first project with a Minnesota utility Great River Energy should go online in 2023; larger projects should be deployed from 2024 onwards. In early 2022, Form Energy partnered with Georgia Power to deploy its largest project to date, which will store up to 15 MW of power.

Why are current energy storage solutions deficient?

The most widely deployed energy storage solution today is pumped hydro. Pumped hydro involves pumping water up to a reservoir when energy is plentiful, then releasing it when needed. According to the IEA, pumped hydro represents about 95% of the world’s energy storage. But pumped hydro is limited to hilly geographies. Several startups like Energy Vault are working to commercialize gravity-based energy storage, but that technology also has drawbacks, such as noise.

Other energy storage solutions rely on lithium-ion batteries that power electric cars and consumer electronics. However, lithium-ion batteries need hard-to-source metals and minerals like lithium, nickel, and cobalt. Lithium and other battery metal prices have soared recently. Some of these metals are mined in places like Chile, Indonesia, and the DRC, where mining comes with social and ethical issues. Besides, lithium-ion batteries store energy for a short duration.

Other alternatives include solid-state batteries, yet to be commercialized, and green hydrogen, which is prohibitively expensive.

A cheaper storage alternative that can be deployed anywhere would be welcome.

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How do Form Energy batteries work?

Form Energy is optimizing the iron-air battery for the electric grid.

Unlike lithium-ion batteries, iron-air batteries need cheap, abundant materials like iron and water. Iron is the most mined metal on the planet. As a result, Form Energy says that its batteries cost less than $20/kWh or a tenth of lithium-ion battery storage.

Form Energy works with ArcelorMittal to develop iron materials for the batteries. The company wants to source the iron in the U.S. and manufacture batteries where they are needed.

According to the company, batteries work based on “reversible rusting.” When discharging, batteries breathe in oxygen from the air, converting iron to rust. When charging, electrical current converts rust back to iron, and the battery breathes out oxygen. Although Form Energy has not invented the technology, which has been around for decades, it may be the first to commercialize it.

Credit: Form Energy

Form Energy claims that its batteries can store electricity for 100 hours. Each battery is sized like a washing machine, and batteries can be grouped together in large blocks, placed pretty much anywhere, and connected to the grid. They are also non-toxic and highly recyclable.

Unfortunately, the iron-air batteries discharge power slowly and are too big and heavy for electric cars. But this is not a problem for the electric grid. The batteries can also be paired with lithium-ion batteries, which discharge power faster.

Is Form Energy a publicly traded stock?

Form Energy is a private company, so you can’t invest in its stock in the public markets.

Will Form Energy go public?

So far, the company hasn’t announced any plans to IPO. Form Energy raised $240 million from investors in 2021, so the company may have enough cash at the moment. It could also continue to raise cash from private backers instead of going public.

That doesn’t mean you can’t invest though.

How to buy Form Energy stock

Pre-IPO platforms like EquityZen and Forge (SharesPost) let you buy shares in private, pre-IPO companies from employees who get stock options. Private startup employees may feel rich on paper, but it’s hard to buy a house or pay for college with stock options. So you may be able to buy stock from them. The caveat is that they always know more about the company than you do, and you can’t know for sure why they are selling.

Pre-IPO investing is risky, so these investments are only for accredited investors. To be an accredited investor, you generally need to:

  • Earn $200,000 a year for two years and expect the same this year OR
  • Your net worth should exceed $1 million, excluding your main home

You can learn more about pre-IPO investing here. If you are an accredited investor, you can check out Form Energy pre-IPO shares on EquityZen or Forge.

Form Energy is a secretive company that doesn’t publish public data. So you have to rely on the diligence Breakthrough Energy Ventures and other investors have done.

🔔 Looking for other storage and grid investments?  Learn more about investing in battery storage stocks and smart grid ETFs.

NOT INVESTMENT ADVICE. The content is for informational purposes only; you should not construe any such information as investment advice.

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