How to land investors who fund game-changing companies

A lot of problems worth solving aren’t ones that you can solve in a year or two or even 10.

For founders and investors alike, such long timelines can seem daunting. But for Gene Berdichevsky, co-founder and CEO of battery tech startup Sila, hard tech problems are also some of the most tantalizing.

“It’s always a good time to be a hard tech startup,” Berdichevsky said at TechCrunch Disrupt. “One of the reasons is that the world doesn’t change just because it should. It changes because someone goes after something insanely hard and actually succeeds at it.”

Such startups run the gamut from advanced batteries like those made by Sila to nuclear fusion, quantum computing, automation and robotics. Any tech that has the potential for such broad impact also has a massive potential market, and that means a certain class of investors are willing to be in it for the long haul.

“Hire people to do the technical stuff. Keep an eye on it, but then go learn the other pieces.” Gene Berdichevsky, co-founder and CEO, Sila

“We look for real step-change, game-changing technologies that are going to benefit everyone and we think that will drive a huge [total addressable market],” said Milo Werner, a general partner at The Engine.

When Berdichevsky founded Sila, he believed his company’s technology, a silicon-based anode that promises to improve lithium-ion battery energy density by 20%–40%, would be a significant enough advance that it would have no problem finding a market.

What he didn’t expect was how long it would take. When Sila’s first product debuted inside the Whoop 4.0 wearable last year, the path to market had been twice as long as Berdichevsky had expected.

How to land investors who fund game-changing companies by Tim De Chant originally published on TechCrunch

DOE awards $2.8B to battery companies to boost domestic production

The Biden-Harris administration, through the Department of Energy (DOE), announced Wednesday that 20 battery companies will receive a combined $2.8 billion to build and expand commercial-scale facilities in 12 states.

This is the first phase of $7 billion in total from President Biden’s Infrastructure Law that aims to strengthen domestic battery supply chains and reduce reliance on China for battery supply and production as more vehicles become electrified. The companies getting funds will work to extract and process lithium, graphite and other battery materials, manufacture components and demonstrate new ways of acquiring critical materials, including battery recycling, domestically or within free trade agreement countries, the DOE said.

The DOE didn’t specify which companies were awarded funds, but Gene Berdichevksy, co-founder and CEO of battery chemistry company Sila, told TechCrunch his startup received $100 million from the fund. Sila is replacing the graphite in the anode with silicon, which the company says not only makes a better battery but also avoids the supply chain constraints from sourcing graphite from China. The money will go toward Sila’s upcoming Moses Lake, Washington facility, which aims to deliver 10 gigawatt-hours of capacity annually.

Berdichevsky will likely touch on the news today at TechCrunch Disrupt, where he’s joining a panel on building companies with longer time horizons.

The DOE said the federal investment will be matched by recipients to bring in more than $9 billion to boost American production of clean energy technology, which supports Biden’s goal of all new vehicle sales being electric by 2030.

Earlier this year, Biden also passed into law the Inflation Reduction Act, which included a set of stipulations for consumers to qualify for EV tax credits, including the need for critical battery materials to be sourced domestically or in free trade agreement countries, rather than China.

The DOE has a series of goals for the selected projects, including developing enough battery-grade lithium to support about 2 million EVs annually, enough graphite to support 1.2 million EVs annually and enough nickel to supply about 400,000 EVs annually.

The funding will also help install the first large-scale, commercial lithium electrolyte salt production facility in the U.S. and the first lithium iron phosphate cathode facility in the U.S., among other facilities.

The DOE did not respond in time to TechCrunch’s request for comment or more information.

DOE awards $2.8B to battery companies to boost domestic production by Rebecca Bellan originally published on TechCrunch

Sila’s Gene Berdichevsky on the ‘5-year roller coaster’ facing battery companies

As hundreds of thousands of EVs come to market over the next few years, demand for critical battery materials like lithium, graphite, nickel, and cobalt has never been higher. Automakers are scrambling to ensure their own supply of key raw materials and, in the process, reduce their reliance on China, the dominant force in the industry.

The result? The price of raw materials has skyrocketed, and it might not come back down to earth for some time.

Battery chemistry company Sila says it has a solution to relieve at least one of the current bottlenecks — replacing the graphite in a battery cell’s anode with silicon, which can be made anywhere. The startup finds itself in a perfect storm of product-market fit and is steadily advancing on its path to produce battery cells for automakers on U.S. soil.

“I didn’t think the U.S. was gonna pass legislation that is an order of magnitude bigger than anything Europe’s ever done for climate. But it’s very American to wait for a while and then come in big.” Sila CEO Gene Berdichevsky

In the year since we last interviewed Sila’s co-founder and CEO, Gene Berdichevsky, Sila announced that its silicon anode material will appear in the Mercedes electric G-Class in 2025. In addition, Sila purchased a facility in Washington that will produce automotive-scale quantities of Sila’s battery technology starting in 2024.

In that time, the Inflation Reduction Act became the law of the land. The IRA will provide tax incentives for EVs that are manufactured in the U.S. and that are built with critical materials manufactured in the U.S., which has become a massive tailwind for battery startups like Sila.

We sat down again with Berdichevsky to talk about how the IRA will affect the battery industry, when material supply constraints will ease, and why battery recycling will become the next big industry.

The following interview, part of an ongoing series with founders who are building transportation companies, has been edited for length and clarity.

TechCrunch: Your new factory will produce 10 gigawatt hours of capacity annually. When you announced the buy, you told me that scaling from 10 GWh to 150 GWh would require another $2 billion. Are you currently doing another round?

Gene Berdichevsky: That’s still true. We haven’t announced a fundraise for that yet, but when we’re ready we’ll need a combination of equity and debt. There’s no reason to raise $2 billion of equity once you have a proven factory and customers and all the rest. Part of that could be leveraging the Department of Energy loan guarantee, as well, which is the same program that funded Tesla, Ford, GM and others to build EVs over the last decade.

Sila’s Gene Berdichevsky on the ‘5-year roller coaster’ facing battery companies by Rebecca Bellan originally published on TechCrunch

Lithium-silicon batteries get vote of confidence with Sila’s Mercedes deal

For years, scientists and engineers predicted that lithium-ion batteries would get a boost if they could just add more silicon. In the lab, the prediction held, but only for a short period of time. The material had a downside — it became brittle after repeated charging.

Sila seems to think it’s solved the problem. The startup, along with its strategic partner Mercedes-Benz, announced that its silicon anode material is scheduled to appear in an electric G-Class in 2025. That suggests not only that is Sila confident that its technology can meet the automaker’s high requirements, but also that it can produce the material in sufficient quantity to give the blocky SUV a decent range.

CEO Gene Berdichevsky, who designed the battery for the Tesla Roadster, founded the company with the goal of replacing graphite anodes with silicon, and it has been working to perfect its silicon anode for over a decade. That persistence appears to be paying off.

Today, nearly all lithium-ion batteries use graphite because it offers a stable home for lithium ions when charging. But graphite isn’t very energy-dense, especially when compared with silicon. To hold one lithium ion, graphite needs to devote six carbon atoms to the task. One atom of silicon, though, can hold onto four lithium ions.

Electric Mercedes G-Class will go the distance with Sila’s energy-dense silicon anodes

Mercedes-Benz announced today that Sila’s energy-dense silicon anode is slated for an extended-range version of the electric G-Class that’s due out in 2025.

Sila said that its silicon anode material can boost energy density by 20% to 40% over existing cells, enabling a longer range from battery packs that occupy the same physical space. That extra density will come in handy when powering Mercedes’ blocky, brawny G-Wagen.

Mercedes first invested in Sila in 2019 as part of a $219 million Series E round. Earlier this month, the startup announced that it had purchased a 600,000 square-foot factory in Moses Lake, Washington. The plant is expected to start cranking out battery materials in late 2024 before reaching full production in early 2025, just in time for the G-Class. It should make enough silicon anode material for 100,000 to 500,000 EVs, depending on how automakers want to incorporate it into their cells.

Today, Sila’s technology is available in the Whoop 4.0 fitness tracker, a small device with a battery that’s a tiny fraction of what’s needed for an EV. Still, the smaller scale will allow Sila to perfect its manufacturing technique, working out the kinks before scaling up 100x to reach the volumes needed by automakers.

The first phase of the company’s Washington plant will make 10 GWh of battery materials per year, but CEO Gene Berdichevsky told TechCrunch earlier this month that the second phase will expand production to 150 GWh.

Getting to that point won’t be cheap. Berdichevsky estimated that it’ll cost another $1 billion to $2 billion to get the second phase of the factory into production. The company has raised $933 million in total, according to PitchBook, including a $590 million round that closed in January 2021.

While raising a couple billion is never an easy task, Sila may benefit from a tailwind: As automakers have ramped up their commitments to EVs, VCs and private equity firms have been investing larger and larger sums into battery companies—some $43 billion over the last five years alone.

Ballooning US EV registrations raise opportunities for startups

Electric vehicle volumes are soaring in the U.S. — with registrations up 60% in the first quarter of the year — even as the country’s auto market contracted 18% as continued parts shortages constrained inventories.

Between January and March, U.S. consumers registered 158,689 EVs, according to Experian. With EV volumes rising and automakers selling fewer fossil-fuel vehicles, EVs captured 4.6% of the market in the first quarter.

Tesla took four of the top 10 spots, and the marque’s Model Y, Model 3, and Model S swept the top three, according to a report from Automotive News. The Ford Mustang Mach-E took fourth place, and Hyundai’s Ioniq 5 and Kia’s EV6 took fifth and sixth, respectively. (Experian reports registration data because Tesla does not disclose sales figures for the U.S. only, and other automakers don’t break out sales of EV versions of certain models.)

None of the recent upstarts, including Rivian or Lucid, broke their way into the top 10, though that’s not surprising. Both companies have only recently entered production on their first vehicles, which are pricey enough to limit the size of their potential market.

Still, as those companies and other large firms like Volkswagen and GM begin to ramp production, consumers will soon be able to choose from a range of models at a variety of price points.

That’s all but certain to drive further gains for EVs — and even more opportunities for startups to capitalize on the growth.

The most obvious winners in all this will be battery technology startups. Venture capitalists and private equity firms have been closely following automakers’ growing commitments to electrification and have been lavishing money on promising companies. In the last five years, they’ve made nearly 1,700 investments in battery startups totaling $42 billion, according to a TechCrunch/PitchBook analysis. Three-quarters of those deals closed in the last two years.

Batteries have become VC and PE’s most electric investment opportunity

For the better part of a decade, VC firms and growth equity funds have plowed nearly $42 billion into battery technology startups across almost 1,700 deals, according to an analysis by PitchBook and TechCrunch. What’s more, about 75% of the investments in that period happened in the last two years alone.

Venture capital firms aren’t unusual in the battery world. Five years ago, they reliably made 50 to 60 deals a quarter, which would be worth a few hundred million dollars in total. That started to change toward the end of 2020 — several quarters in the last two years have seen more than $2 billion invested, and a couple have had more than $3 billion. The number of deals has ticked up, too, nearly doubling in 2021.

But the more remarkable story has been in growth equity. In the past, private equity (PE) deals in the battery sector were sporadic. In the last year, though, they’ve blossomed, with growth equity firms sinking $13.4 billion into such areas as battery materials, manufacturers and recyclers.

PE’s presence reflects a shift in both the industry and the way investors view it. Batteries are normally considered a high-risk, high-reward investment; the sort of thing that venture capital is made for. But it’s not perfectly suited to VC, either — the R&D process for batteries can be exceptionally long, often extending beyond venture capital’s usual five- to 10-year timeline for collecting returns. And if the risks from battery startups are tough for VCs to stomach, then it’s an even harder pill for growth equity to swallow.

“Too much money” might explain the size of some of these bets, but it doesn’t explain their existence.

So what changed? There are myriad reasons why both venture capital and growth equity are diving into batteries. Let’s dig in.

The macro changes

For one thing, there’s a lot of money in the economy that’s waiting to be invested, and that might be pushing some funds into territory they hadn’t previously explored. Such a move might make sense for VCs, who are used to scouting and assessing risky technology-based bets, but it doesn’t for growth equity.

“Too much money” might explain the size of some of these bets, but it doesn’t explain their existence. Rather, it’s more likely that VC and PE have sensed that the world is changing, and they’re adjusting their strategies accordingly.

Governments around the world have started to set end dates on fossil fuel vehicles. Countries across Europe began announcing bans in the late 2010s. Norway will end sales of fossil fuel cars and light commercial vehicles by 2025. The Netherlands, Ireland, Sweden and Slovenia will follow suit with passenger cars in 2030, as will Denmark and the U.K. in 2035 and France in 2040.

Sila buys new factory to produce next-gen EV battery tech on US soil

Battery technology company Sila announced the purchase of a new facility in Washington state that will see its next-generation battery chemistry in hundreds of thousands of electric vehicles by the end of 2026, according to the company.

The 600,000-square-foot factory in Moses Lake, Washington, will start producing automotive-scale quantities of Sila’s battery tech by the second half of 2024, with full production underway in early 2025, the company said on Tuesday. It will serve existing joint ventures with automakers like BMW and Daimler, as well as other partnerships that Sila has not publicly named, according to Gene Berdichevsky, Sila’s founder and CEO.

Sila’s battery chemistry replaces the graphite in a battery cell’s anode with silicon to create a cheaper and more energy-dense battery pack, the company said. The new Washington facility, which is powered by hydropower, will be able to deliver 10 gigawatt-hours (GWh) of capacity annually when used as a full graphite replacement, or 50 GWh when used as a partial replacement. That’s enough material to power batteries in up to 100,000 to 500,000 premium electric vehicles and 500 million mobile phones annually, Sila said.

The news comes a day after the Biden administration announced $3.1 billion toward supporting the domestic production of batteries for electric vehicles. A Sila spokesperson told TechCrunch the company is currently reviewing the Department of Energy funds announcement and will likely apply, assuming Sila meets the eligibility requirements.

While the Washington facility will also produce batteries for consumer electronics, Sila has been working to bring its battery chemistry to electric vehicles for over a decade, and it’s finally getting close. (Berdichevsky was the seventh employee at Tesla, where he was one of the first to put a lithium-ion battery into an internal combustion engine vehicle.) Berdichevsky estimates Sila’s technology will make it to EVs anywhere from the end of 2025 to the end of 2026, depending on how long it takes automakers to validate the new tech, a process that can take anywhere from six to 18 months.

Last September, Sila commercialized its next-gen chemistry recipe for the first time, scaling it beyond pilot quantities so that it could appear in Whoop’s new wearable fitness tracker. At the time, Sila told TechCrunch it would need to scale 100 times further to have enough material to deploy in cars, hence the new factory.

“Each [of the two] production line[s] on this new plant will be about 100 times the throughput of the existing production line we have in Alameda,” Berdichevsky told TechCrunch. Sila’s Alameda production line can produce 15 megawatt hours of capacity. “It’s a huge step up and allows us to get to auto scale. The second phase will consist of a fully expanded plant at 150 GWh and that will represent a blueprint for a world-scale plant that we plan to build first in the U.S., and then copy in Europe and Asia in the future.”

The Washington plant, which property records show is located at 3741 Road N NE, is going to cost Sila “several hundreds of millions of dollars,” according to Berdichevsky, which would have been funded in large part by the company’s $560 million Series F last January, which brought Sila’s total funding to around $880 million. Scaling from 10 GWh to 150 GWH will require $1 billion to $2 billion, the executive estimated.

Given the demand for batteries in the U.S. and the fact that presently Asia, specifically China, owns the majority of battery material development and production, finding the capital might not be a problem for Sila.

“The demand for batteries that we’re going to have by the end of the decade, only about 5% of that capacity exists here domestically,” said Berdichevsky. “So you can either look at this as a huge problem, or you can look at it as a massive opportunity. And you either get behind this opportunity or get left behind.”

“The narrative in many ways has been that the U.S. is a laggard in energy and energy transition, and I actually think that’s not correct,” continued Berdichevsky, noting the range of innovation that has come out of U.S. companies, from the sheer existence of Tesla to solar energy ingenuity and fuel cell breakthroughs. “There’s a huge amount of innovation, but the part where we haven’t done as well is manufacturing. Sila has been an example of that same kind of innovation, except now we’re taking it to the second step and focusing on manufacturing domestically.”

Charged with billions in capital, meet the 9 startups developing tomorrow’s batteries today

Ford started production yesterday on its F-150 Lightning pickup truck, a do-or-die vehicle that takes the automaker’s — and the United States’ — best-selling vehicle and swaps its gas-guzzling engines for powerful electric motors juiced by more than 1,800 pounds of batteries.

The mattress-sized pack can deliver over 300 miles of range, but if Ford wants to win over weekend warriors who tow 28-foot motor boats, it’s going to need better batteries.

While today’s batteries can store more energy than ever — they’ve improved in energy density by 5% per year for the last several years — those steady, incremental increases probably won’t be enough to make EVs a no-brainer for many consumers. Today’s cells are better in every respect than those made five years ago, but they still leave much to be desired. What’s needed are some breakthroughs.

EVs are a relatively small part of the overall market for cars and trucks, but they make up nearly 80% of the demand for lithium-ion batteries, far outpacing devices like laptops and phones. And demand is only going to increase. The world is expected to need 5,500 GWh of batteries by 2030, according to Wood Mackenzie, a 5x increase over today, thanks to changing consumer tastes and looming phase-outs of fossil-fuel vehicles.

Over the next five years, the battery world is poised to undergo a significant transformation. I’ve sifted through a long list of startups to find the nine most interesting ones that are developing technologies to make batteries weigh less, charge faster, and last longer. In the last year and a half, they’ve collectively raised $4.1 billion — some of that through special purpose acquisition companies, but the vast majority from late-stage venture and corporate rounds.


The battery tech that’s been getting the most attention recently is solid-state, and for good reason. Automakers are salivating at the idea of EVs with a range of over 400 miles that can be recharged in 15 minutes, which solid-state batteries have the potential to deliver.

Solid-state batteries earn their name by replacing the liquid electrolytes that shuttle ions from one side of the battery to another with solid versions. Solid electrolytes offer a few advantages. For one, they can prevent the growth of dendrites, stalactite-like spikes of lithium that can form on a battery’s electrodes. Dendrites can grow relatively easily in the liquid, so battery makers add an ion-permeable separator to prevent dendrites from bridging the gap between positive and negative electrodes.

If the separator is damaged, as happened in defective Chevy Bolt battery packs, then dendrites can cause a short circuit that can start a fire.

The other thing that solid electrolytes can enable is what’s known as a lithium-metal battery. In a typical lithium-ion battery, when lithium ions are on the anode side, they’re stored in graphite. Graphite anodes are inexpensive and stable, but they add weight to a battery. Eliminating them would help lighter batteries store more energy, but lithium-metal anodes are prone to forming dendrites. To prevent dendrites from growing long enough to short-circuit the battery, researchers are working on solid electrolytes that not only block the stalactites, but also won’t create problems with the anode’s highly reactive lithium.

Three companies in particular show promise in solid-state. One is Factorial, which has raised $253 million, including a $200 million Series D that closed in January and was led by Mercedes-Benz and Stellantis, the automaker created by the merger of the Italian-American Fiat Chrysler Automobiles and France’s PSA Group. Factorial, based in the Boston suburb of Woburn, Massachusetts, had operated in stealth mode until last April.

Why emerging technology founders should tackle the hardest problems first

For the last decade, battery chemistry company Sila has been working to replace the graphite anode in lithium-ion batteries with silicon, a material that’s easier to come by, more environmentally friendly and allows for a battery cell that’s denser and cheaper.

In September, the company shipped its first commercial product with Whoop wearables. Now, Sila aims to scale 100x so it can provide its battery chemistry to power electric vehicles by 2025.

Before Sila was founded, co-founder and CEO Gene Berdichevsky was the seventh employee at Tesla, where he spearheaded the production of the battery pack that was used in the Tesla Roadster, the world’s first highway-legal electric vehicle that ran on lithium-ion batteries.

Considering his background and experience with scale, we caught up with Berdichevsky to explore how founders who work on emerging tech should think about scaling, how they should approach funding and why they should go after the hardest problem first.

Scaling as a part of the innovation process

Billions of dollars have gone into producing different battery chemistries to make better, cheaper and more efficient batteries, but Berdichevsky says there’s a reason they haven’t hit the market yet. A startup could produce a stellar new technology, but if it can’t scale, no one will buy it.

“One of the things we did very early on is, we told our scientists and engineers they could only use global commodity inputs so that we know we can make enough for millions of cars,” Berdichevsky told TechCrunch. “You can’t use anything bespoke; you can’t say we’ll figure it out later.”

Supply chains are strained, particularly as COVID-19 drags on, so it is key to build technology that can scale quickly and cheaply. To do this, Sila also uses bulk manufacturing techniques and ensures its technology can seamlessly drop into any battery factory and existing cells.

To date, Sila has raised $925 million off the back of this strategy.

Funding is a means to an end