Lohum eyes $100 mn funding to grab a slice of global EV battery pie

Lohum plans to expand manufacturing operations in India and abroad, leveraging the surge in electric vehicle adoption. It also expects to complete the funding round, capitalizing on growing investor interest in the sector.

In March, the company had raised $54 million in a Series B round led by Singularity Growth at a valuation of $419 million. 

Lohum has appointed investment bank Avendus Capital to help it navigate its fundraising efforts.

“The formal fundraising process is yet to be launched. It is likely to take 5-6 months to raise the new round,” one of the two people cited above said.

“The company is looking to raise fresh capital as it seeks to expand to North America, the Middle East and Europe,” the second person said. “It closed FY24 with over $500 crore in topline, up from ₹300 crore in FY23. Considering the growth and future potential, there is considerable inbound investor interest.”

Emailed queries to a company spokesperson, as well as Avendus Capital, did not elicit any response till press time.

Founded in 2017 by Rajat Verma, Lohum has secured around $63 million in equity funding, and counts Baring Private Equity, Cactus Venture Partners, Venture East and Stride Ventures as its investors.

According to news reports, it has invested over ₹200 crore for setting up a 1 GW recycling unit, and repurposes 300 MW of electric vehicle (EV) batteries.

The company offers an end-to-end ecosystem, comprising battery recycling, repurposing, refining transition materials, and integrated battery lifecycle management.

On an average, an EV battery lasts up to seven years, or 80,000-100,000 km. Lohum specializes in repurposing and recycling batteries from EVs and other sources. It also produces battery-grade material, such as lithium salts, cobalt, and nickel, catering to the battery manufacturing supply chain.

In March, the company had announced its plans to set up large integrated facilities in Tamil Nadu, the UAE, the US, and Europe. Currently, it operates two plants, in Delhi-NCR and Gujarat.

Lohum’s competitors in the industry include Denchi Group, Sunwoda Electronic, Nth Cycle and Li Industries.

Battery demand

According to a June 2023 report by Avendus Capital on the circular economy, batteries are a critical component for EVs, constituting 30-50% of the cost. 

Demand for Li-ion batteries has surged significantly, following the exponential growth in the EV market, driven by parity in total cost of ownership (TCO), regulatory push, and availability of superior products, it added.

Moreover, li-ion batteries are witnessing significant demand for energy storage and consumer electronics due to their high energy density. According to Avendus, Li-ion battery demand in India may exceed 235 GWh by 2030.

The battery recycling and reuse market is expected to grow 20-fold, reaching $2 billion by FY30, fuelled by increasing EV penetration and the need to conserve and recover rare materials such as lithium, nickel, and cobalt, the report added.

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Published: 25 Apr 2024, 05:49 PM IST