Blue Line Battery Inc., a Beloit-based startup that engineers modular lithium-ion batteries for industrial equipment, has raised $3.1 million in seed financing to support growth it says could amount to a billion-dollar valuation in as little as 24 months, the company said Thursday.
The startup's contract manufacturing partner, MCL Industries Inc. of Pulaski, led the seed financing round, Blue Line Battery head of growth Phil Fonfara said. Blue Line previously did its manufacturing in-house but transitioned that work to MCL last year in order to help scale its operations.
With 80 to 100 end customers ranging from a major consumer goods conglomerate to a well-known luxury vehicle brand, Blue Line Battery has had record sales in terms of orders received in five out of the last six months, Fonfara said. It closed out 2021 with seven-figure gross annual revenue and is on track to hit at least $10 million this year based on current purchase orders received, Fonfara said.
Fonfara estimates at this rate, the company could potentially reach a billion-dollar valuation in 24 to 36 months, based on industry comparisons of competitors like California-based Flux Power Inc. (NASDAQ: FLUX) and Canada's Electrovaya Inc. (TSX: EFL) valued at roughly ten times their annual revenue. He also added that Blue Line Battery is on track to hit profitability this summer.
Blue Line Battery will use the new capital to grow its team, which currently has 19 full-time employees, Fonfara said. He estimates Blue Line will hire 12 to 24 additional employees this year.
The company also is investing in getting its UL certification, a time and capital-intensive industry safety accreditation process that many potential customers require but that few other lithium-ion forklift battery makers have, Fonfara said.
"Once we get UL certification, our revenue can 10x overnight," Fonfara said. "If you have (UL certification), you get access to a tier of deals that is exclusive until you have it."
The modular design of Blue Line's lithium-ion forklift batteries makes them more reliable, more easily serviceable and more standardized than the competitors', Fonfara said.
With the latest financing plus the $1.5 million pre-seed capital round Blue Line closed in summer 2021, the company has raised $4.6 million to date, Fonfara said. Its previous round was led by Grey Collar Ventures, which reinvested in Blue Line's latest financing round. Grey Collar is the investment arm of Beloit's Hendricks Commercial Properties LLC owned by Wisconsin billionaire Diane Hendricks.
Other participating investors in Blue Line Battery's seed round included Milwaukee Venture Partners; Wisconsin River Business Angels, which also participated in its pre-seed round; gener8tor-affiliated G Angels; Tundra Angels; and BrightStar Wisconsin Foundation, Fonfara said.
This article has been updated to clarify that the company said a billion-dollar valuation is within reach.
