Redwood Materials just closed a massive $350 million Series E round led by Eclipse, with strategic backing from Nvidia's venture arm NVentures. The funding values the battery recycling company at roughly $6 billion - up from $5 billion last year - as it pivots toward powering the AI data center boom with repurposed EV batteries. Founded by former Tesla CTO JB Straubel, Redwood is betting big on turning discarded electric vehicle batteries into grid-scale energy storage for hungry AI workloads.
Redwood Materials is making a bold pivot that could reshape how AI companies power their hungry data centers. The battery recycling startup founded by former Tesla CTO JB Straubel just secured $350 million in Series E funding, with the round led by venture firm Eclipse and featuring a strategic investment from Nvidia's venture capital arm, NVentures.
The funding values Redwood at approximately $6 billion, according to sources familiar with the round speaking to TechCrunch - a billion-dollar jump from its previous valuation. That meteoric rise reflects investor appetite for companies positioned at the intersection of sustainability and AI infrastructure.
What started as a battery recycling play in 2017 has evolved into something far more ambitious. Redwood originally focused on creating a circular supply chain by extracting valuable materials like cobalt, nickel and lithium from discarded electronics and battery production scrap. The company supplies these recycled materials to major customers including Panasonic, GM, and Toyota.
But Straubel spotted a bigger opportunity hiding in plain sight. The company recovers more than 70% of all used or discarded battery packs in North America, and many of these retired EV batteries still have significant life left in them - too much to justify immediate recycling. Enter Redwood Energy, the company's newest division launched earlier this year to repurpose these batteries for grid-scale energy storage.
The timing couldn't be better. AI data centers are consuming electricity at unprecedented rates, with some facilities requiring as much power as small cities. Nvidia's strategic investment through NVentures signals the chip giant's recognition that sustainable energy infrastructure will be critical for AI's continued growth.
