Redwood Materials Stock and IPO: Will the Battery Recycler Go Public Soon?

Founded by Tesla co-founder and CTO JB Straubel, Redwood Materials has become the top lithium-ion battery recycling company in the United States. After all, the world needs not only renewables but also ways to ensure that green technology doesn’t create more waste down the road. If you want to invest in Redwood Materials but aren’t sure how, read on to learn more.

TJ Porter   Updated March 11th, 2022

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What is Redwood Materials?

Redwood Materials is a company that recycles lithium-ion batteries, such as those found in the following four markets:

The waste generated by these industries includes many metals and minerals that can be recycled and reused. Batteries include valuable metals such as lithium, nickel, and copper. By recycling these materials, Redwood Materials reduces the waste generated by green technologies.

JB Straubel founded the company in 2017 after spending 15 years at Tesla as co-founder and CTO. His role at Tesla made him realize the need for solutions to the waste produced by electric cars and other industries.

Why is battery recycling important?

According to a report from the International Energy Agency, the number of electric vehicles on the roads rose from almost none in 2010 to more than 10 million in 2020, with no indication that this trend will reverse. Lithium-ion batteries are also becoming more common in other markets, notably energy storage. 

As electric cars reach the end of their useful life, they’ll be discarded or broken down for parts. Without the capacity to recycle the batteries in these vehicles, all of the materials used in their batteries will go to waste.

That’s why battery recycling is crucial. And yet today, only 5% of batteries in EVs are recycled each year. 

In an interview, Straubel stated that there would likely be a bottleneck as reliance on batteries continues to grow, but supplies of battery metals are lacking. Recycling batteries can increase the supply of these materials, reducing the bottleneck. 

Recycling also means less reliance on mining, which damages the environment and creates reliance on countries like the Democratic Republic of Congo (DRC), the world’s largest cobalt producer.

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What is special about Redwood Materials?

Despite its short history, Redwood Materials has already become the top lithium-ion battery recycler in the United States. There are a few factors that set the startup apart from the competition.

Most important is the company’s technology, which is capable of recovering 95%+ of the valuable elements in the batteries it recycles. Redwood Materials says it can reclaim almost all of the nickel, cobalt, lithium, copper and other metals and repurpose them into raw materials for use in new batteries.

Another factor is the company’s focus on a closed-loop, B2B supply chain. It aims to take used batteries from customers like Panasonic, extract whatever valuable materials remain and then sell them back to Panasonic and other customers.

Further, the Carson City, Nevada-headquartered Redwood Materials is firmly rooted in the United States. They try to locate facilities next to suppliers-customers like Tesla or Panasonic. The end goal is to provide a domestic source of raw materials that come from overseas. At the moment, according to BloombergNEF, China accounts for 80% of the global supply of battery components and materials. Russia is a major source of nickel and Chile is a big lithium supplier.

Redwood Materials is also growing fast. In 2021, the company announced a strategic partnership with Ford. This partnership includes plans to supply Ford with raw materials to build new EVs. In the future, the companies expect to build the infrastructure to have Redwood dismantle Ford’s EVs and remanufacture their components into new batteries.

In 2022 Redwood continued its growth by expanding into Europe. This gives it access to another large market where by 2025 30% of cars sold are expected to be EVs.

The company already has partnerships with others in the battery industry. It has also purchased land near a Panasonic and Tesla Gigafactory in Sparks, Nevada.

Is Redwood Materials publicly traded? When will it go public?

Redwood Materials is not publicly traded, and the company has not indicated when it plans to go public. In an interview with Bloomberg in 2021, Straubel said that an IPO is “not off the table, but we’d prefer to grow the company in other ways for a little bit longer.”

However, the company has raised a lot of money from private investors. In 2020, Redwood Materials raised $40 million in a Series B funding round. The money came from investors such as Amazon and Bill Gates’ Breakthrough Energy Ventures.

More recently, in July 2021, Redwood Materials brought in another $700 million. The funds came from institutional investors like Fidelity and the Canada Pension Plan Investment Board. Based on its most recent funding round, the company is supposed to be worth $3.7 billion.

How to buy Redwood Materials stock

Just because Redwood Materials isn’t publicly traded doesn’t mean there is no way to invest. If you are an accredited investor, you may be able to buy shares in some pre-IPO companies.

Pre-IPO stocks are stocks of companies that have not yet gone public, like Redwood Materials. They are not traded on the wider stock market. Instead, transactions take place between private investors. Sellers may include company employees who received stock options or early investors. This also means that the shares are less liquid and hard to value.

Shares in some pre-IPO companies, including Redwood Materials, are available on pre-IPO investing sites like EquityZen. However, only accredited investors can invest. An accredited investor is an investor who meets one of these requirements:

  • Have an earned income of $200,000 (or $300,000 with a spouse) in each of the previous two years and expect the same in the current year
  • Have a net worth of $1 million or more, excluding their primary residence
  • Hold a Series 7, 65, or 82 license

Alternatives to Redwood Materials

If you are not an accredited investor and want to invest in a company similar to Redwood Materials, consider these battery recycling stocks:

Li-Cycle Holdings (LICY)

Li-Cycle Holdings is a publicly-traded Canadian company. Like Redwood Materials, it focuses on recycling critical components of lithium-ion batteries. The company claims to recycle as much as 95% of the metals in a battery. It has partnered with and received investments from battery makers like LG Chem and LG Energy. At the time of this writing, Li-Cycle Holdings had a market capitalization of $1.4 billion.

American Battery Technology Company (ABML)

American Battery Technology Company is another battery recycling business founded by a former Tesla employee. They say that they can improve raw material recovery rates by avoiding high-temperature processing. At the time of writing, ABML had a market capitalization of $622 million.


🔔 Looking for other battery investments?  Learn more about investing in battery storage stocks and battery 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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