ElectricVehicleBatteryTechintheUK2023January2023Page/2Dealroom.coistheforemostdataprovideronstartup,early-stageandgrowthcompanyecosystemsinEuropeandaroundtheglobe.FoundedinAmsterdamin2013,wenowworkwithmanyoftheworld'smostprominentinvestors,entrepreneursandgovernmentorganizationstoprovidetransparency,analysisandinsightsonventurecapitalactivity.Globalstartup&venturecapitalintelligenceplatform.UKResearchandInnovationconvenes,catalysesandinvestsinclosecollaborationwithotherstobuildathriving,inclusiveresearchandinnovationsystemthatconnectsdiscoverytoprosperityandpublicgood.TheFaradayBatteryChallengeisdeliveredbyInnovateUKforUKResearchandInnovationonbehalfoftheUKgovernment.Withaninvestmentof£541millionbetween2017and2025,thechallengeaimstomaketheUKasciencesuperpowerforbatteries.BysupportingtheUKʼsworld-classbatteryfacilitiesalongwithgrowinginnovativebusinessesthataredevelopingthebatterysupplychainforourfutureprosperity.Thisisdeliveredthroughthreepartners;theFaradayInstitution,InnovateUK,andUKBatteryIndustrialisationCentre,andsittingaspartofawiderandinterconnectedsupportprogrammeforbatterydevelopmentandcommercialisation.Buildingathriving,inclusiveresearchandinnovationsystemPage/3TheUKElectricVehicleBatteryEcosystemTheElectricVehicle(EV)landscapeisavastinterconnectedecosystem.Thisreportfocusesonitsfoundationcomponent,EVbatteries.VehicleintegrationAutonomousVehiclesExcluded:EVChargingEVMarketplacesRenewableenergyAdvancedmaterialsEV(parts)manufacturingSemiconductorManufacturingEVFleetoptimisationOthercellandbatterymanufacturingSource:Dealroom.coEnergystorage(notforEV)Tier2Tier3ScopeofthisreportPage/4TheEVBatteryecosystem-materialmanufacturingtorecycling.EVBatterymanufacturingEVBatteryrecycling&secondlifeEVBatterymanagementsystemsEVBatterymaterialmanufacturingLi-ioncellmanufacturingTheUKElectricVehicleBatteryEcosystemEVBatterysupplychainSource:Dealroom.coPage/5ThevalueoftheUKEVBatterytechecosystemhasdroppedsince2021,butoverallvalueofprivatestartupsisstillgrowing.TheUKEVBatterytechecosystemgrewinvaluetoreach$10.8Bin2021.Itwascut75%toreach$2.7Bin2022.Thevalueofprivatestartupscontinuestogrowoverall,however,andexcludingBritishvolthasdoubledsince2021.2020201920182016201720212022$2.7B$10.8B$2.2BCombinedenterprisevalueofUKEVBatterystartupsValueofpubliccompaniesValueofprivatecompaniesUKEVBatterystartupsraised$418M,theirsecondbestyearonrecord.Investmenthasgrown5.4xbetween2017and2022,toreach$418M.Growthininvestmenthasbeendrivenbylatestageroundsandafewmegarounds,raisedbyNexeon,ZenobeandArrival.2020201920182016201720212022$418MInvestmentraisedbyUKEVBatterystartupsTheUKEVBatteryecosystemrankssecondinEuropeforVCInvestment.With$1.2Braisedsince2018,theUKrankssecondinEurope,andthirdworldwide(excludingChina).UnitedStatesSwedenUnitedKingdomSouthKoreaCanadaTaiwanCombinedVCInvestmentinEVBatterystartupsince2018$1.2B$215M$451MKeytakeaways.Source:Dealroom.co.2022ValuationofBritishvolthasbeenadjustedfollowingthenewsofitsliquidation.Chinaisexcludedfromthisanalysis.ValuationofBritishvoltPage/6TheUKEVBatteryecosystem123FundinglandscapeGlobalcompetitivenessTableofcontentsCo-authors:ThomasBartlettDeputyDirectoratFaradayBatteryChallengeInnovateUKNinaChaloumEcosystemInnovationAnalystatDealroomLouisGeoffroy-TerrynGovernmentResearchLeadatDealroomWithcontributionsfrom:RickHaoPartneratSpeedinvestAlexGawleyFounder&GeneralPartneratZeroCarbonCapitalIanCampbellCEO&Co-founderatBreatheBatteryTechnologiesAnnaWisePh.D.HeadofStrategicProgrammesatNyoboltJordanFletcherKnowledgeTransferManager-InvestmentCommunitiesatInnovateUKKTNAoifeMorrinGovernmentEngagementManageratDealroom1TheUKEVBatteryecosystemPage/8CombinedenterprisevalueofUKEVBatterytechcompaniesfoundedsince1990»viewonlineSource:Dealroom.co.2022ValuationofBritishvolthasbeenadjustedfollowingthenewsofitsliquidation.Distinctionbetweenpublicandprivatevalueismadebasedoncurrentownershipofeachrespectivestartup.2020201920182016201720212022ValueofpubliccompaniesValueofprivatecompanies$2.7B$10.8B$2B$10B$6B$2.1B$3.9BUKEVBatterytechstartupsarenowworth$2.7B,a75%dropsince2021.Thevalueofprivatestartupscontinuestogrowoverall,however,andexcludingBritishvolthasdoubledsince2021.$2.2B$1.1BExcludingthevaluationofBritishvolt,thevalueofprivatestartupshasdoubledbetween2021and2022.Page/9Cohorts,byyearfounded▊2015-now▊2010-2014▊2005-2009▊2000-200422%$10B$5B$10.8B2.7B$3.9B2020201920182016201720212022CombinedenterprisevalueofUKEVBatterytechcompaniessince1990»viewonline49%69%20%EnterprisevalueperlaunchyearCloseto50%ofthevalueisconcentratedincompaniesfoundedsince2015.Source:Dealroom.coPage/10RickHaoPartneratSpeedInvestTheopportunitypresentedintheEVbatteryspaceisenormous.Inanominalscenario(tofulfillstatedenvironmentalpolicies),theworldneedstobuildover100millionEVsbefore2030.Thismeansweneedatleast10xcapacityincreaseinbatteryproductsrelatedtoEVapplication,increasingfrom0.16TWhtodayto1.6TWhin2030.Outsideanominalscenario,itispossiblethetransportationsectorwillneedtocontributemuchmoretoclimategoals,whichcouldresultinover200millionEVsanda20xbatterycapacityincreasebefore2030.Withthislevelofdemand,thestrainisplacedateachpartofbatterysupplychain,fromminingtorecycling.”“Page/11DiscoverthemostpromisingUKEVBatterytechcompaniesusingpredictivesignals.Source:Dealroom.co»ExploretheUKEVBatteryecosystemPage/12Unicornsand$1Bexits$250M-1BFutureunicorns$250M-1BFundedinthelast5yearsRisingstars$50M-250MFundedinthelast5yearsYearFounded202020192018201720162015Before2015MostoftheUKʼsmostprominentandrisingEVbatterystartupshaveemergedinthelasteightyears.Source:Dealroom.coArrivalexitedatavaluationof$13Bin2021.ZenobeiscountedaspartofthemainscopeduetotheiractivitiesprovidingsecondlifeforEVbatteries.Page/13EnterprisevalueofstartupsinselectedUKRegionsSelectedstartupsbyregionSouthEastEnglandGreaterLondonEastofEnglandSouthWestEnglandYorkshireandtheHumberNorthEastEnglandScotlandWestMidlandsNorthWestEnglandWales$1B$931M$476M$175M$145M$109M$41M$40M$25M$10MEcosystemvalueperUKnation&region.Source:Dealroom.coPage/14BatterypassportsCellmanufacturing&improvementModuleandPackcomponentsmanufacturing&improvementBatterymanagementPEMD&BatteryIntegrationBatteryendoflifeMaterialsupply&productionEVManufacturingCorescope(Tier1)AdditionalScope(Tier2&3)TheUKEVBatterysupplychain.Source:Dealroom.co.Thelogosshownarenotexhaustivebutadiscretionaryselectionofthecompaniesofthecategory.Page/15AnnaWisePh.D.HeadofStrategicProgrammesatNyoboltAkeychallengetothesuccessofEVBatteryisthetransitiontohighvolumeproduction,andthetimeittakestodoso.Challengesareavailabilityofsuitablesiteswithsufficientpower,planningandpermittingrequirements,limitedexistingskillsbasealongwithbarrierstorecruitinternationallyincellmanufacturing,aswellasaccesstothelevelsofinvestmentrequired.Securingsustainablesupplychainsisachallengeacrosstheindustryglobally.”“2FundinglandscapePage/17$100M$300M$400M$200M$500M$55MVCInvestmentinUKEVBatterystartups»viewonline2020201920182016201720212022$418M$229M$456MJan/Aug2022$220MLateVCSep2021$70MSeriesBJan2022$27MSeriesAJul2022$57MSeriesB$74M$34M$77MSelectedtoproundssince2021Jun2022$25MSeriesBNov2021$24MEarlyVCUKEVBatterytechstartupsraised$418Min2022,theirsecondbestyearonrecord.Source:Dealroom.coRoundwithmultiplecloses.FundingroundsexcludedgrantsandSPACPrivatePlacements.Page/18VCinvestmentinUKEVBatterystartupsperroundsize▊$0M-$1M(pre-seed)▊$1M-$4M(seed)▊$4M-$15M(seriesA)▊$15M-$40M(seriesB)▊$40–€100M(seriesC)▊$100–$250M▊$250M+202020192018201620172021202220%40%60%100%80%UKEVBatteryMegarounds2022$220MLateVC2020$198MGrowthEquityVC2020$118MGrowthEquityVC$113MLateVCRecordinvestmentyearshavebeendrivenbylatestagerounds&megarounds.Source:Dealroom.coRoundwithmultiplecloses.FundingroundsexcludedgrantsandSPACPrivatePlacements.Page/192020201920182016201720212022SelectedUKEVBatteryPre-SeedtoSeriesBroundsPre-SeedtoSeriesBInvestmentinUKEVBatterystartups▊$0M-$1M(pre-seed)▊$1M-$4M(seed)▊$4M-$15M(seriesA)▊$15M-$40M(seriesB)$394M$100M$50M$79.6M$108M$27.3MEarlyandmid-stageinvestmentreachedarecord$108Min2021.2022fundingfellshortoflastyearʼs,butisstillup2.9xfrom2020.Source:Dealroom.coFundingroundsexcludegrantsandSPACPrivatePlacements.Page/20100%75%25%50%Restoftheecosystem22%(3%<percompany)6%12%16%21%23%VCfundingishighlyconcentratedinafewcompanies.TopUKEVBatterystartupsperfundingraisedSource:Dealroom.coTotalof25+UKEVBatterycompanieswhichhavereceivednongrantfunding.FundingroundsexcludegrantsandSPACPrivatePlacements.Fundingtotalbasedonpubliclydisclosedfundingroundsandfundingamounts.Page/2130%7%18%43%1%25%50%75%100%201720182019202020162021VCinvestmentinUKEVBatterystartups»viewonlineInvestmentbylocationofinvestors▊UnitedKingdom▊Europe▊USA▊Asia▊Restoftheworld▊UndisclosedUKEVBatterystartupsareattractingincreasinglevelsofforeigninvestment,81%in2022.USinvestorsaccountedforthemostvalue,followedbyAsianinvestors.2022Source:Dealroom.coInvestmentsraisedisequallydistributedamonginvestorswhichparticipatedintheround.Page/22VenturecapitalPE&otherfundCorporateSelectedUKinvestorsactiveintheUKEVBatteryecosystemThepoolofdomesticinvestorsishighlydiverse.Source:Dealroom.coVentureCapitalincludesinvestorswithactivitiesinbothPEandVC.Page/23IngevityCorp.VCsCorporates&CVFsPEs&OtherFundsNorthAmericaRestofEuropeSouthKoreaRestofEastAsiaIsraelSelectedforeigninvestorsactiveintheUKEVBatteryecosystem.Source:Dealroom.coPage/24▊VentureCapital▊Corporate▊Others21%22%57%20%60%80%100%40%InvestmentinUKEVBatterystartups»viewonlineInvestmentbyinvestortype2017201820192020201620222021CorporateinvestorStartupRound$113MLateVC$220MLateVC$70MSeriesB$66MSeriesB$46MLateVCSelectedroundswithcorporateinvestorparticipationCorporatesfunded57%ofinvestmentraisedbyUKEVBatterystartupsin2022,against17%fortheUKasawhole.CorporateinvestorsmakeupalargeproportionofthesourceofcapitalforUKEVbatterystartups,contributingto57%totalinvestmentraised.Source:Dealroom.coRoundswithmultiplecloses.Page/25AlexGawleyFounder&GeneralPartneratZeroCarbonCapitalMuchlikewindandsolar,theEVBatteryindustryisnowupandrunningandscalingrapidly.Unlikeafewyearsago,orotherareasofdecarbonisationwherethereisstillmoreofagreenfieldopportunity,investorsandcompaniesmustthinkcarefullyabouthowtheywillintegratetheirinnovationintothisburgeoningindustry.Technologiesthatleverageexistingmassiveinfrastructureinvestmentshaveabigshort-termadvantage.Technologiesthathaveareallysignificantstepchangeinperformancecanoperateoutsideofthecurrentparadigm,butmustbepreparedforalongerroutetoscale.”“Page/26ResearchDevelopScaleIndustrialiseStrategicscientificresearchInnovatenewproductsbasedonstrategicresearchRefineproductstobeready-for-marketScaleandmassproduceScalinghigh-techbusinessesBuildingaScienceSuperpowerOpenaccessscaleupwithGigafactorycapabilityAutomotiveTransformationFundFaradayBatteryChallengeInvestmentandValueTheFaradayBatteryChallengeisinvesting£541mtodevelopaUKbatterytechnologyindustrythatishightech,highvalueandhighskill.Institutional&publicsectorbackersareactivelysupportingUKEVBatterystartupsthroughouttheirlifecycle.Source:UKRI.orgPage/27SelectedUKEVBatteryspinouts»viewonlineCompetitiveuniversityresearchgroupsacrosstheUKhavecombinedtheirstrengthtoworkasactivecollaborators,representinganewmodelforconductingcommercially-relevantresearch.ThisresearchcommunityworkswiththedirectionandguidanceofUKstartupsandotherindustrialpartners,andtheircollaborativeprojectsreceivefundingandsupportfromdedicatedpublicsectorprogrammes.22+universitiesandresearchinstitutesstrengtheningtheecosystemStartupSpunoutfromUniversityofCambridgeImperialCollegeLondonUniversityofOxfordUniversityofCambridgeUniversityofOxfordImperialcollegeLondonUniversityofManchesterUniversities,keytocommercialisingresearch.Source:Dealroom.co,FaradayBatteryChallengeFundedprojectstodate(September2021).Thelogosshownarenotexhaustivebutadiscretionaryselectionoftherelevantuniversities.Page/28IanCampbellCEO&Co-FounderatBreatheBatteryTechnologiesThebiggeststrengthoftheUKBatteryecosystemisperhapsthejointambitionofindustry,governmentandacademia.Together,theyaimtopromote,supportandcatalysetheirinteractiontocreatesmooth,funded,efficientpathwaysfromlowTechnologyReadinessLevelsthroughtoscalablecommercialisation.Forinstance,theFaradayBatteryChallengewithitsratherholisticfundingportfolio,fromFaradayInstitution-fundedSTEMengagementatapre-universitylevelthroughtoFBC-fundedcallsforgrantfundingindustrycollaborations.Thisambition,andtheactionsthatarebeingtakeninlinewithit,arewhatIbelievemakeitrealisticforUKbatteryecosystemplayerstofightandsucceedinsecuringgloballeadershippositions.”“3GlobalcompetitivenessPage/30$636B$3.6BCombinedEnterprisevalueofEVBatterystartups,2022UnitedStatesSwedenCanadaUnitedKingdomGermanyTaiwanNorwayJapanIsraelFrance$26.9B$2.7B$2.6B$2.5B$2.3B$2B$1.8B$1.6BTheUKEVBatteryecosystemhasthesecondhighestenterprisevalueinEurope,afterSweden.Source:Dealroom.coChinaisexcludedfromthisanalysis.Page/31VCinvestmentinEVBatterystartupsCumulatedinvestment2018-2022$19.4B$1.2B$468M$426M$301M$295M$282MUnitedStatesSwedenUnitedKingdomSouthKoreaCanadaTaiwanJapanNetherlandsGermanyFrance$6B$514M$233MTheUKranksasthesecondEuropeanecosystemforEVBatteryinvestmentsince2018.Source:Dealroom.coChinaisexcludedfromthisanalysis.Page/3220212022GrowthH12022vs.H12021Norway$33M$110MGermany$30M$111MIsrael$35M$80MUnitedKingdom$229M$418MCanada$170M$133MNetherlands$138B$89MEurope$6.7B$2.4BSweden$3.2B$1.1BFrance$123M$40MUnitedstates$8.9B$2.6BVCfundinggrowthofselectedEVBatteryecosystems2021vs.20221.8x3.4x3.2x2.3x0.8x0.6x0.4x0.4x0.3x0.3xInvestmentintheUKEVBatteryecosystemhasgrown1.8xsince2021,showingstrongerresiliencethanmanyofthetopfundedecosystems.Source:Dealroom.coPage/33BlackRockHamiltonRobinsonCapitalPartnersInvescoIngevityCorp.VCsCorporates&CVFsOtherFundsUnitedStatesEuropeIndiaEastAsiaIsraelAustraliaKeyinvestorsactiveinEVBatterytechfundingglobally.Source:Dealroom.coPage/34Areportonhigh-growthcompanies.Startupsarecompaniesdesignedtogrowfast.Generally,suchcompaniesareVC-investablebusinesses.Sometimestheycanbecomeverybig(e.g.$1B+valuation).Whenstartupsaresuccessful,theydevelopintoscaleups(>50people),grownups(>500people)andresultinbigcompanies.Onlycompaniesfoundedsince1990,i.e.sincetheinformationage,areincludedinthisreport.TechnologiesdevelopedbyUKEVBatterystartupsareatthecenteroftheunderlyingtransitionoftheentiremobilityandtransportationsectortowardsnet-zero.ThisreportputstheUKʼsEVBatteryecosysteminregionalandinternationalperspective,leveragingDealroomʼsextensiveEuropeanandGlobalcoverageofemergingtechecosystemsandventurecapitalinvestment.Chinaishoweverexcludedfromanybenchmarkinganalysis.Thisreportcomplementsthe2021BatteryGapreportcommissionedbyUKRI,lookingatinvestmentsinUKbatteryandelectro-mobilitytechnologycompanies.AfocusontheUKEVBatteryecosystem,withaglobalperspective.Thisreportfocusesonstartups,basedintheUK,withcoreorparticalactivitiesarecenteredaroundbatterytechforelectricvehicles.2021Report“TheBatteryGap”UnderlyingDataThisreportbuildsonDealroomʼsproprietarydatabaseandsoftware.Dealroomaggregatesdataonstartupsandinnovationecosystemsgloballyfrommultiplesources:harvestingpublicinformation,user-submitteddataverifiedbyDealroom,dataengineering.Alldataisverifiedandcuratedwithanextensivemanualprocess.Thedataonwhichthisreportbuildsisavailableviaapp.dealroom.co.Formoreinfopleasevisitdealroom.coorcontactsupport@dealroom.co.ExploretheUKEVBatteryecosystemonDealroomValuationThecombinedvaluationofthetechecosystemisbasedontheirmarketcaporlatesttransactionvalue.TransactionvalueisrealizedfromexitorimpliedunrealisedvaluationfromthelatestVCround,whichiseitherannouncedorestimatedbyDealroombasedonbenchmarks.Whatisaunicorn&$1Bexit?Unicornsare(former)startupsthatreachedUS$1Bvaluationorexitatonepointintime.Inthisreport,Arrivalisconsidereda$1Bexit,havingexitedatwithavaluationof$13.0Bin2021.Britishvoltisnotfeaturedasaunicornfollowingtheannouncementofitsinsolvency.WhatisaUnicorn?Whatisastartup?Methodology&definitionsSource:Dealroom.coPage/35InvestorpartnershipsTheFaradayBatteryChallengeiscommittedin2023tosupportinghighgrowthbatterycompaniesacrosstheUKbyaligninggrantfundingwithequityinvestmentthroughtheInvestorPartnershipsProgramme.ThisprogrammebringstogetherInnovateUKʼsuseofgrantfunding,andinvestorpartnersʼalignedfundingandexpertise.Itsaimistostimulateresearchanddevelopmentinmicro,smallandmedium-sizedenterprises,whilstacceleratingequityinvestmentintothosecompaniessothattheycangrowmorerapidlythroughinnovation.InterestedinvestorscanreachouttoJordanFletcher.InvestmentReadinessProgrammeThethirdeditionoftheFaradayBatteryChallengeInvestmentProgrammewillonboarditscohortofcompaniesin2023.Theprogrammeprovidesinvestmentsupporttoearlystagebatterycompanieslookingtoraisebetween£500k-£3mandisrunbyInnovateUKKTN.Thelasttwoprogrammeshavesupported20+companiesraisingover£10minequityinvestment.Nextroundopensin2023.ReadabouttheInvestmentReadinessProgramof2022DiscovertheUKBatteriesNetworkTheCross-SectorBatterySystemsInnovationNetworkCo-fundedbyInnovateUKKTNandtheFaradayBatteryChallenge,theCross-SectorBatterySystemsInnovationNetworkaimstocreateanopenandcollaborativecross-sectoralcommunityforresearchersandinnovatorsinbatterymanufacturing(includingnext-generationbatteries),therelatedsupplychainandend-users.UKEVBatterypublicsupportprogrammes.Investorpartnershipsfutureeconomyprogramme