NEU Battery Materials, a lithium-ion battery recycling startup, raised $3.7 million in an oversubscribed Seed Funding Round led by SGInnovate, a Singapore government-backed Deep Tech investor and ecosystem builder. ComfortDelGro Ventures, Shift4Good, Paragon Ventures I, and other angel investors joined the round.

Last Year, the company raised S$800,000 (~$0.54 million), led by Momentum Venture Capital and Se-cure Waste Management.

The Singapore-based startup is pioneering an electrochemical redox targeting technology for recycling battery materials. Their patented process requires electricity as its only consumable and utilizes regenerative chemicals to avoid toxic waste and harsh acids.

This technique produces battery-grade lithium, which can be supplied back to battery manufacturers, and as per the company, it is the world’s first redox-targeting recycling method capable of processing lithium iron phosphate (LFP) batteries according to the company.

“Recycling batteries holds strategic significance, especially within the European Union (EU). According to the EU’s Green Deal, the goal is to recover 50% of lithium by 2027, ramping up to 80% by 2031. Yet right now, Europe only recycles about 1% of its lithium,” stated Sebastien Guillaud, Managing Partner – Shift4Good.

The funds raised in the round will be used to accelerate the deployment of NEU Battery Materials’ automated recycling line, lowering operational workforce requirements. The startup will also focus on further developing partnerships in key global markets to support their battery requirements and forge new direct partnerships with EV OEMs and battery manufacturers to further the adoption of its technology within the transport and mobility sector.

“LFP battery recycling, when done sustainably, will be the foundation of a viable circular economy for batteries – offering new, more stable supply and revenue streams while reducing the negative, and often unequal negative impacts of mining,” said Tong Hsien-Hui, Executive Director – Investments, SGInnovate.

Recently, the startup broke ground on a 150-square-meter pilot recycling plant in Singapore, capable of processing approximately 150 tons of lithium batteries a year. The company is also working with Saft Batteries via TotalEnergies’ R&D Teams to cooperate on LFP battery recycling laboratory trials.

According to Mercom’s Q1 2023 Funding and M&A Report for Storage and Smart Grid, Total corporate funding—including venture capital (VC) funding, debt financing, and public market financing—in Energy Storage came to $2.2 billion in 27 deals compared to $4.3 billion in 31 deals in Q4 2022. Funding decreased significantly year-over-year (YoY) compared to $12.9 billion in 27 deals in Q1 2022.