Sweden-based lithium-ion battery manufacturer Northvolt signed a $1.1 billion convertible note to finance its expansion of battery cell and cathode material production in Europe to support the rapidly expanding demand for batteries.

Investors participating in the capital raise were AMF, AP funds 1-4 (via the co-owned company 4 to 1 Investments), ATP, Ava Investors, Baillie Gifford, Compagnia di San Paolo through Fondaco Growth, Folksam Group, Goldman Sachs Asset Management, IMAS Foundation, Olympia Group, OMERS Capital Markets, PCS Holding, Swedbank Robur, TM Capital, and Volkswagen Group.

The company is developing manufacturing capacity to deliver on $55 billion orders from key customers, including BMW, Fluence, Scania, Volvo Cars, and Volkswagen Group.

“The combination of political decision making, customers committing even more firmly to the transition to electric vehicles, and a very rapid rise in consumer demand for cleaner products has created a perfect storm for electrification,” said Peter Carlsson, Co-Founder, and CEO of Northvolt.

Goldman Sachs Bank Europe SE, J.P. Morgan AG, and Morgan Stanley & Co. International plc acted as joint placement agents to Northvolt.

Since 2017, Northvolt has secured close to $8 billion in equity and debt funding. Last year, the company signed $2.75 billion in private placements to finance its battery cell production expansion and R&D efforts. It also acquired Cuberg, a U.S.-based battery technology company delivering lithium metal cells produced on existing lithium-ion manufacturing lines for electromobility solutions.

In Q3 2020, Northvolt raised $600 million in a private placement of equity financing from Goldman Sachs Merchant Banking Division, IMAS Foundation, Scania, Volkswagen, Baillie Gifford, Baron Capital Group, Bridford Investments Limited, Norrsken VC, PCS Holding, Cristina Stenbeck, Daniel Ek.

According to Mercom’s Q1 2022 Funding and M&A Report for Storage, Grid, and Efficiency, total corporate funding (including VC, Debt, and Public Market Financing) in Battery Energy Storage came to $12.9 billion in 26 deals compared to $4 billion in 27 deals in Q4 2021. Funding was up significantly year-over-year (YoY) compared to $4.7 billion in 18 deals in Q1 2021.