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Local climate tech companies score big funding rounds

Ascend Elements' battery recycling and cathode manufacturing facility in Westborough.Ascend Elements

What venture capital slowdown?

In one of the biggest funding deals of the year, Westborough-based Ascend Elements, a pioneer in lithium-ion battery recycling, has received $542 million in new venture investment to hasten construction of a massive factory in Kentucky. Meanwhile, another cleantech innovator, Woburn-based Boston Metal, scored $262 million in new funding for its efforts to produce “clean” steel by using electricity rather than coal.

The two deals, announced Wednesday, suggest the VC financing market for established climate tech startups is still strong, particularly locally.

For Ascend Elements, the new money comes from a broad array of global investment firms, including Decarbonization Partners, Singapore-based Temasek, and the Qatar Investment Authority. In all, $1.5 billion has been invested in Ascend since the company was founded in 2015. The company also has received $480 million in grants through the federal infrastructure act passed by Congress last year.


Based on technologies developed at Worcester Polytechnic Institute, Ascend grinds up old lithium-ion batteries and uses a blend of water and acid to extract lithium, nickel, and cobalt from the rubble. The company then reprocesses these metals for reuse in cathodes for new lithium-ion batteries. Ascend says its method uses relatively little energy and produces little toxic waste.

“We as a society cannot be reliant upon mining these critical metals out of the ground, producing batteries, and then throwing the batteries away,” said Ascend chief executive Mike O’Kronley.

Many other startups, including Beverly-based Nth Cycle, are racing to develop better ways to recycle lithium-ion batteries. But O’Kronley said his company not only extracts the metals but reprocesses them into a ready-to-use compound for making new batteries.

Last year, Ascend began construction of a $1 billion, 1-million-square-foot factory in Hopkinsville, Ky. The plant will be capable of producing sufficient battery cathode materials for 750,000 cars per year. In February, the company announced an agreement to supply recycled battery materials to Japanese automaker Honda, and in June announced a deal to provide up to $5 billion in cathode material to an unnamed US automaker, starting in the fourth quarter of 2024.


The new funding for Boston Metal comes from multiple investors, including Aramco Ventures, M&G Investments, and Breakthrough Energy Ventures.

Boston Metal is based on innovations developed at the Massachusetts Institute of Technology. The company uses electrolysis to remove the oxides from iron ore, instead of the standard method which uses coke, a form of coal, to burn away the oxygen. These old-school blast furnaces generate massive amounts of waste carbon gas, but the Boston Metal method leaves behind mostly molten iron and oxygen.

Adam Rauwerdink, Boston Metal’s senior vice president of business development, said most of the new funding will go into research aimed at scaling up the company’s process so that it can produce massive amounts of steel at low cost. But some of the money will also be spent at Boston Metal’s facility in Brazil, which uses the same technology to produce specialty metals like tin, niobium, and tantalum. (Rauwerdink said these metals command far higher prices per kilogram than steel, providing the company with a substantial revenue stream.)

The spike in local cleantech investment comes amid an overall worldwide slump in venture funding. According to CB Insights, global VC funding in the second quarter declined by 13 percent from a year ago, and US venture funding by 27 percent.


But Tod Hynes, senior lecturer in the Martin Trust Center for MIT Entrepreneurship, said cleantech investment funds have stockpiled over $120 billion in cash over the past two years and are on the lookout for wise places to invest it.

“There was a lot of money raised and they’re still deploying that capital,” Hynes said. In addition, the federal Inflation Reduction Act targeted cleantech companies with billions in grants, tax breaks, and loan guarantees, making the sector more attractive to investors.

He added that “we need to transition the global economy away from industries that cause global warming. This is a massive transformation that will require a lot of investment, and there will be many winners as well as losers.”

Hiawatha Bray can be reached at hiawatha.bray@globe.com. Follow him @GlobeTechLab.