Executives with a Mountain View-based battery materials startup just couldn't wait to finish raising their $60 million Series B to announce a partnership with the largest automotive maker in the United States.
Even though the executives with Mitra Chem Inc. were only two-thirds of the way to reaching their funding target, they said they needed to get a crucial piece of news out — they had secured the General Motors Company (NYSE: GM) as the lead investor of the Series B. Detroit-based GM will work with Mitra Chem to develop iron-based cathode materials, the startup said Wednesday.
"The U.S. is facing a pivotal moment when it comes to climate change," said Vivaswath Kumar, co-founder and CEO of Mitra Chem, in an interview with the Business Journal. "And the reason why we chose GM to be our primary customer is because we wanted to help enable their battery supply chain to be more (Inflation Reduction Act) compliant."
Last year, Congress passed and President Joe Biden signed the Inflation Reduction Act, a measure aimed at not just reducing inflation — which rose 7% in 2021 and another 6.5% in 2022 — but also addressing climate change. The act aims to cut greenhouse gas emissions by 40% below 2005 levels by 2030.
The measure allocated $369 billion in funds in spending and tax credits for low-emission forms of energy. But much of that money is contingent on private investment, which has drastically slowed in the past year. Meanwhile, the demand for U.S.-made battery materials has become supercharged, according to Kumar.
Batteries rely on two types of electrodes for an electric charge. One is a cathode, which is the positive electrode, while the anode is the negative electrode. Generally, cathodes are made from nickel and cobalt, but some companies are developing iron-based cathodes, which Kumar said last longer and can be cheaper for automakers in the long run.
Founded in 2021, Mitra Chem is one of those companies behind iron-based cathodes, more specifically lithium manganese iron phosphate cathodes. It is developing the cathodes to be compatible with GM’s electric vehicle architecture, Ultium.
GM announced its Ultium project in 2020, saying it would serve as the automaker's foundation for electric vehicle development. Kumar said, Mitra Chem's tech should be in in the Ultium line by end of the decade.
Two years ago, GM committed to build a global battery supply chain, pledging to invest $35 billion on electric vehicles and battery plants through 2025. According to TechCrunch, GM has committed $13.5 billion to four different U.S. battery factories, which collectively aim to produce 165 gigawatt-hours by 2026.
"GM is accelerating larger investments in critical subdomains of battery technology, like cell chemistry, components and advanced cell production processes. Mitra Chem’s labs, methods and talent will fit well with our own R&D team’s work," Gil Golan, GM’s vice president of Technology Acceleration and Commercialization, said in a news release.
With $40 million from the first batch of the Series B, Mitra Chem aims to round out the funding round with another $20 million. Kumar said he hopes to make that announcement in the coming weeks for a total Series B round at $60 million.
In addition to GM, others participating in the Series B's $40 million start are Social Capital, Fontinalis Partners, Earthshot Ventures, The Keffi Group, Boutique Venture Partners, GS Futures, Bricks Capital Management, Zeon Ventures, Scribble VC, WovenEarth Ventures and Bonds Investment Group.
Before the Series B, Mitra Chem raised a $20 million Series A round that was led by Social Capital Holdings Inc. According to PitchBook at the time of that round in June 2021, the company was valued at $70 million.
Earlier this month, Mitra Chem competed at the Startup World Cup regional competition held at the Computer History Museum. It competed against 14 other companies at the Pegasus Tech Ventures event, beating them all to land a spot in the grand finale on December 1 in San Francisco.
