Spotify CEO Backs Tesla Rival Northvolt in $ 600 Million Funding Round

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LONDON – Daniel Ek, Founder and CEO of Spotify, has invested in Swedish battery company Northvolt, which is building a Gigafactory in the Swedish region of Lapland.Northvolt, headquartered in Stockholm, said on Tuesday it had raised $ 600 million in equity from Ek, Swedish businesswoman Cristina Stenbeck and institutional investors such as Baillie Gifford, Baron Capital Group, Bridford Investments Limited, Norrsken VC and PCS Holding. Current shareholders of Northvolt, Goldman Sachs Merchant Banking Division, IMAS Foundation, Scania and Volkswagen also participated in the funding round.

The investment in rival Tesla comes less than a week after Ek pledged to invest € 1 billion ($ 1.2 billion) of its own wealth in “moonshot” bets in Europe. According to Forbes, Ek is worth $ 3.7 billion, indicating that he allocates around a third of his own wealth to funding European technology.

“I want to do my part; we all know that one of the biggest challenges is access to capital, ”said Ek, adding that he wanted to realize a“ new european dream ”.

“I get really frustrated when I see European entrepreneurs abandon their amazing visions by selling to non-European companies early on, or when some of Europe’s most promising tech talent leave because they don’t feel valued here,” he said. Ek told the Slush tech conference last Thursday. “We need more super companies that raise the bar and can serve as inspiration. ”

Founded in 2016, Northvolt aims to develop the world’s greenest lithium-ion battery. The company, created by two former Tesla executives, is seeing its batteries being used to power new electric cars built by some of Europe’s biggest car makers.

It is building a Gigafactory to produce the batteries in Skelleftea in northern Sweden and plans to start production in 2021.

The company, which already employs around 800 people, said it will use the new funding to increase the number of battery cells and systems it can produce. It will also use the money to double the size of its labs and create a “gargantuan-scale recycling facility” capable of recycling lithium in addition to cobalt, nickel, manganese and other metals.

“We are in the middle of a race to establish manufacturing capacity in Europe, and I believe the companies that are best able to attract talent and capital, while scaling their plans the most quickly, will be the top performers, ”said Peter Carlsson, co-founder and CEO of Northvolt, in a statement.

“With these world-class partners behind us, we have created a solid foundation to continue and execute our plans to enable large-scale manufacture of green batteries in Europe.

Northvolt is also seeking approval to set up a second Gigafactory in Salzgitter, Germany, and expects operations to begin in 2024.

Last June, Northvolt raised $ 1 billion from Volkswagen, BMW and others.

In July, he announced that he had raised $ 1.6 billion in debt through a consortium of commercial banks, pension funds and public financial institutions. This included a loan of $ 350 million from the European Investment Bank, which is a public institution whose shareholders are EU member states.

Also in July, BMW signed a € 2 billion battery cell contract with Northvolt which will see Nortvolt’s batteries used in its upcoming electric cars.

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