“Like gangbusters.” That’s how Joe Fisher, chief executive for Azusa, Calif.-based startup CFX Battery envisions the company growing in 2010. Of course the lithium-ion battery cell developer will need funds to do that, and Wednesday announced that it has raised $14.2 million in a second round of financing to help it continue research and development, set up production, double its staff and begin its first deliveries.
Fisher told us in an interview that the company plans to turn on its initial production line by April, with plans to churn out hundreds of prototype battery cells each day in the short term. In the second or third quarter of this year CFX plans to ramp up to more than 30,000 per day, and by year’s end the company hopes to start shipping to customers.
Co-founded in 2007 by Rachid Yazami, research director of France’s National Center for Scientific Research, Caltech professor Robert H. Grubbs and French chemist Andrew Hamwi, CFX Battery is working with technology developed at Caltech to produce prismatic (flat), cylindrical, thin-film and coin battery cells.
As part of this year’s planned ramp-up, CFX (one of our 20 Battery Startups Hitting the Road with Lithium-ion) expects to grow its team to 50 people over the next four months, up from just 26 today and only seven people a year ago. Fisher anticipates half of the new hires will be engineers and lab technicians, and the other half will work on production.
Today’s announcement comes nearly six months after CFX Battery announced the first $5 million of this round, and it brings the startup’s total financing to nearly $30 million. According to Fisher, the startup’s current funding will see CFX through the middle of 2011, when it then expects to seek additional financing.
Already, Fisher told us CFX has a “major effort is under way” pursuing government funds from a range of sources, including grants and loans at the state and federal level, military projects, and programs funded by the Department of Energy, DARPA and the National Institute for Standards and Technology (NIST).
“We purposely didn’t go after a lot of the auto funding opportunities,” said Fisher, notably the battery grant program. “We didn’t want to take our eye off the ball,” he said. Many of the smaller, venture backed startups that applied for funding under the program, and were disappointed to see big grants go to some of the industry’s heavyweights, “really were only dreaming,” said Fisher.
CFX business development chief Eric Lind explained some of the earliest markets for CFX tech will likely be niche transportation applications, like tire pressure monitoring, and specialty applications like custom RFID cards and displays. Potential customers in the consumer electronics and defense sectors have also expressed interest, he said.
This plan is consistent with what CFX has described in the past: focusing first on building “primary” lithium batteries, which can’t be recharged, gaining a foothold in established markets, and then reinvesting the revenue into the company’s rechargeable battery work for applications including electric cars, as well as mobile phones and laptops.
In March, CFX plans to reveal some more information about “why our tech is different from all the other stuff that’s out there,” said Lind, which could involve a partnership or two, he added.
CFX hopes to “play” in the automotive, as well as the smart grid, market “eventually,” said Fisher, but it’s targeting lower-hanging fruit to start. “We’ll let the big guys fight it out on the smart grid and auto, and hype it,” he said. “In the meantime, we’ll go after smaller, more profitable niches.”