Startups looking to sell the next generation of batteries for our electric and hybrid vehicles will have to grow big fast to grab lucrative deals with the automakers. While A123 Systems is preparing an IPO to bring in funds for growth, a startup called International Battery, which develops lithium ion batteries and power management systems for electric and hybrid vehicles, says it is looking to raise a massive $100 million in early 2009 to fuel an aggressive expansion.
John Kaufman, CEO of the four-year-old company, presented International Battery’s goals at the Dow Jones Environmental Capital Conference this week. Kaufman said $100 million in funding would help the company expand manufacturing 300 percent and ramp up its product sales. The company is already in the process of expanding, and earlier this month, the startup officially opened a plant in New Jersey. The company currently has 50 employees, but it plans to expand to 250 within several years.
International Battery actually got its start building battery technology for military applications and more recently moved into developing batteries for consumer and fleet electric and hybrid vehicles. Pesky oil-inspired wars aside, the military has been a prominent customer and investor in cleantech — particularly when it comes to buying battery technology for soldiers and vehicles.
Kaufman explained that the company has lithium ion battery technology from 1.2 volt size for mobile devices all the way up to 500 to 900 volts for large defense vehicles. The startup has also developed two kinds of battery technology — lithium cobalt oxide, and lithium ion phosphate — as well as a variety of battery and power management systems.
The company needs to raise that 9-digit figure because it isn’t selling in a vacuum — it’s competing with many well-established battery makers and well-funded startups. A123 Systems has already raised more than $132 million — even before its IPO. (With International’s original $30 million from investors including Act Capital Management, Digital Power Capital, and Keane Capital, its funding next year could match A123’s pre-IPO total.) There are also big players such as Saft, Valence, Johnson Control and Yardney competing in the same markets.
Then there’s all the other startups working on different battery chemistry. Earlier this month, eight-year-old company PowerGenix started showing off its nickel-zinc battery in a retrofitted Prius. Batteries for our future hybrids and all-electric vehicles are proving to be one of the most difficult parts of the vehicles to develop; we’re glad there are so many companies looking to build working solutions.