Swedish battery maker Northvolt raised $2.75 billion in its biggest financing round yet to help fund expanded production capacity and maintain a leadership position in Europe's burgeoning battery industry.
The supplier to automakers including Volkswagen and BMW announced the private placement on Wednesday. The placement was co-led by Swedish pension funds AP1, AP2, AP3, AP4 and Omers Capital Markets, alongside existing investors Goldman Sachs Asset Management and VW Group.
VW on Wednesday said it was investing 500 million euros ($609 million) in Northvolt as part of the funding round, keeping its stake in the supplier stable at around 20 percent.
Northvolt was founded by former executives from Tesla to build a European supply chain for lithium ion batteries.
The company aims to take on major Asian players such as CATL and LG Chem and targets a 25 percent market share in Europe by 2030. It announced an order worth more than $14 billion from VW in March.
However, as other projects in the region are gathering pace, Northvolt will need to step up its plans to reach the market share target.
"Including the private placement, Northvolt has now raised more than $6.5 billion in equity and debt to enable an expansion plan leading up to and beyond 150 GWh of deployed annual production capacity in Europe by 2030," Northvolt said.
The funds raised in the latest financing round will be used to expand annual capacity at the Northvolt Ett factory in Skelleftea, Sweden, to 60 gigawatt hours, from an earlier target of 40 GWh.
"We have a solid base of world-class investors and customers on-board who share Northvolt's mission of building the world's greenest battery to enable the European transition to renewable energy," Northvolt CEO Peter Carlsson said in a statement on Wednesday.
Skelleftea will be the company's first large-scale manufacturing facility, producing cells by the end of this year.
Bloomberg and Reuters contributed to this report