Here’s the 7-slide pitch that convinced Bill Gates’ VC fund that a tiny startup could be the future of electric car batteries
This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now.
- Mangrove Lithium is developing tech to process materials needed for electric car batteries.
- Bill Gates’ VC fund Breakthrough Energy Ventures just led a $10 million Series A into the startup.
- It used the following slides to pitch VCs like Breakthrough Energy Ventures.
Bill Gates-led climate venture fund Breakthrough Energy Ventures led a $10 million Series A round into a startup that could help solve the electric vehicle industry’s next looming shortage: raw battery materials.
Mangrove Lithium is a Vancouver, Canada-based outfit developing what it says is a faster and less expensive way to refine and produce the massive supply of lithium needed for the future of EV batteries. Canadian entrepreneur bank BDC Capital’s cleantech practice also participated in the investment round.
The global market for lithium ion batteries for vehicles is expected to hit $221 billion by 2024, estimates market intelligence firm Guidehouse Insights. More sustainable and more cost-effective processing methods like Mangrove’s are gaining popularity as automakers turn their product lines over from gas-powered to electric and rely on lithium for their batteries.
“That raw material, we believe, is going to limit how many EVs can actually end up on the road,” CEO Saad Dara told Insider. “There just isn’t enough lithium being produced economically. Where that lithium comes from, where that capacity comes from, is going to be the bottleneck.”
Mangrove, spun off from a project at the University of British Columbia and founded in 2017, is not in the business of lithium extraction or battery manufacturing. Instead, it’s optimizing the step in the middle, using an electrochemical processing technology to produce lithium carbonate or lithium hydroxide, the raw material used in EV battery cathodes or anodes. The company plans to license its technology to upstream extraction companies — Dara suggested working with startups like Lilac Solutions, which has also been backed by Breakthrough — to EV battery producers, and eventually, to automakers.
Aside from the market growth potential, opportunities for lithium processing stem from the concern that accelerating demand for the material will soon create a supply crisis like the global chip shortage. Plus, American and European manufacturers are looking to reduce reliance on Chinese producers.
Breakthrough Energy Ventures has invested $2 billion in startups looking to solve the industry’s biggest challenges surrounding EVs. The fund led the recent $25 million Series A funding round of Our Next Energy, an EV battery startup that’s targeting 700 miles of vehicle range with its technology. The fund has also invested in solid-state battery company QuantumScape and Form Energy, a startup developing batteries with longer energy storage capabilities.
Dara shared the pitch deck Mangrove is using to pitch its vision. Insider redacted sensitive information.
Mangrove boiled down its business to four key points, emphasizing why its process is important for the future of EVs, the challenges it’s looking to solve, how it offers a better solution than others in the space, and what it ultimately helps to address.
More on the problem: Without investments in the lithium processing industry, EV battery manufacturers and automakers could face a major supply bottleneck in the future.
Where Mangrove fits in: The startup emphasized its role in the electrochemical processing part of the lithium ion battery supply chain.
Here, Mangrove shows the challenges with traditional lithium processing technologies, including the high cost, complexity, and quality issues that lead to the failure to produce battery-grade material.
The need for EV battery-grade lithium is only going to accelerate as more and more automakers transition their product lines to electric. In this slide, Mangrove shows what differentiates its approach: It’s lower-cost, simpler, and faster than methods traditionally used to process lithium for EV batteries.
Mangrove’s demo plant in Vancouver is used to test materials with different lithium producers. The testing will help build an industrial scale plant for deployment in 2022. Here, it gives investors a glimpse of that operation.