Connect with us

Investment

Former Tesla CTO's battery materials recycling company announces US$700 million+ investment – Energy Storage News

Published

 on


Published: 30 Jul 2021, 07:13

A lithium-ion battery pack specially designed to be easily recycled, made by a UK startup called Aceleron. Image: Aceleron.

Former Tesla battery guru JB Straubel’s materials recycling company Redwood Materials has attracted more than US$700 million in investment.

Redwood, which is currently developing processes to produce battery materials that can be resold into the supply chain, has partnerships in place with the likes of Panasonic, Envision AESC and Amazon. The company pledges to recycle any device with a lithium-ion battery including phones, laptops and power tools, although a major focus is being placed on electric vehicle (EV) batteries.

The new investment will enable the company to significantly expand its capabilities and create new battery materials within the US, it announced on 28 July. In June, Redwood said it plans to increase the size of its facilities in Carson City, Nevada, to 550,000 square feet, and to build at another large site in Nevada at the Tahoe-Reno Industrial Center. It also wants to recruit 500 more employees in the next couple of years.

A “carefully selected group of strategic investors” took part, including Goldman Sachs Asset Management, Baillie Gifford, Canada Pension Plan Investment Board and Fidelity, in a round led by investment management group T. Rowe Price Associates. Investors that also participated in a previous Series B round also invested again, including Bill Gates’ Breakthrough Energy Ventures and Amazon’s Climate Pledge Fund.

“We are excited to begin this investment in the talented and accomplished team at Redwood as they expand their pursuit of building a world-class sustainable, closed-loop battery supply chain for electric vehicles,” T. Rowe Price Growth Stock Fund portfolio manager Joe Fath said.

“In our view, the need for these materials will grow exponentially over time as we enter the era of decarbonisation. We believe Redwood is well-positioned to be at the forefront of tackling this emerging and critically important problem.”

Redwood CEO Straubel was one of Tesla’s co-founders and was chief technical officer at the company before founding his recycling venture in 2017. Straubel had hinted at the scale of the recent investment at an online event hosted by the US Department of Energy in June, telling Secretary of Energy Jennifer Granholm and viewers that recycling can enable very high utilisation of materials, helping to solve a “pretty challenging supply chain problem” that lies ahead.

At that event, which was focused on the challenges and opportunities of creating an advanced battery manufacturing value chain within the US, Secretary Granholm asked Straubel what the investment — which at the time he said would be in the order of “hundreds of millions of dollars” — said about the recycling space today.

Straubel replied that it showed that recycling is already very economically competitive, with recycled materials actually able to compete on price with mined materials. He added that Redwood is finding feedstock from the EV and consumer electronics sectors to be abundant. However, he noted that the market for recycled materials is currently in China, where they are sent to be reused in new products, rather than in North America. This highlighted gaps in refining and synthesis value creation in the US, the CEO said.

What role will stationary storage systems have in the recycling landscape?

Energy-Storage.news has recently heard from two different companies involved in battery recycling in North America and Europe that stationary storage systems will play a significant role in the coming years.

Finnish state-owned energy company Fortum announced its own US$30 million investment into a battery materials recycling plant in June which it hopes to open fully in 2023, capable of recovering lithium-ion, nickel, manganese and cobalt through a hydrometallurgical process, adding to existing facilities the company has in its home country.

Fortum’s head of its battery business line Tero Holländer told Energy-Storage.news that while the largest volumes of batteries for recycling will come from the EV segment, the share of batteries from energy storage systems (ESS) will also be significant.

Similarly, Canada-headquartered startup Li-Cycle, which has facilities in Canada and the US, recently formed a partnership with battery life cycle management company Renewance aimed at cost-effectively and sustainably processing ESS batteries.

Li-Cycle chief commercial officer Kunal Phalpher told the site that the ESS segment has a “crucial role” to play, with EVs “far from being the exclusive point of focus for the industry”.

“Stationary energy storage is playing a crucial role in the big picture of battery recycling, especially in the United States which is experiencing rapid growth and is in need of finding efficient methods to recycle all of the batteries stemming from facilities being decommissioned and/or upgraded,” Phalpher said.

In September last year, analysts from IHS Markit told the audience at an event hosted by our publisher Solar Media that more or less every stakeholder in the lithium-ion battery supply chain will see it as being in their interests to establish an effective recycling industry.

Stay up to date with the latest news, analysis and opinions. Sign up here to the Energy-Storage.news Newsletter.

Adblock test (Why?)



Source link

Continue Reading

Investment

Putting Money Where the Stats Are: The Case for Gender-Balanced Investing – International Banker

Published

 on


By Nada Shousha, Vice-Chair, Egyptian American Enterprise Fund and Adviser, International Finance Corporation, and Amal Enan, Chief Investment Officer, American University in Cairo

We invest in strong management and solid businesses, regardless of gender”—this is common rhetoric of fund managers, whose industry is historically dominated by men. Less than 1 percent of the $70 trillion of global financial assets is managed by minority- or women-owned firms1U.S. Securities and Exchange Commission: Diversity and Inclusion Report.. As allocators of capital, we’ve become numb to reading management reports of publicly listed companies dominated by men; in fact, only 0.01 percent of all IPOs (initial public offerings) in the United States were led by female founders. We also know that it takes a village to get there, and early backers determine where founders end up. So, where are the investors in female founders along their journeys? Is being gender blind leading us to miss out on the larger opportunities?

Creating inclusive markets that solve problems of limited access to healthcare, education, financial and other services hinges on enabling diverse business leaders. Women are not only half of the market and a large part of the labor force, but they are also drivers of household expenditures. Their inability to access markets excludes entire families from better standards of living.

Countless studies have shown the benefits that materialize from gender diversity in building companies that deliver both financial returns and social benefits. Yet, in the venture-capital and private-equity (VC and PE) industries, which provide entrepreneurs with access to funding when public-equity markets and debt may be less viable sources of capital, women remain severely underrepresented as investment decision-makers and as capable investees and recipients of growth funding.

Billions of dollars are invested in growing startups every year; 2 percent of those dollars go to female founders2Fast Company: “Why it’s incredibly rare for companies led and founded by women to IPO,” Leslie Feinzaig, July 16, 2021.. The lack of diversity is even more pronounced in emerging markets and is dismal in the Middle East and North Africa (MENA), where we both work. Venture funding in the region reached record highs, crossing the billion-dollar mark in 20203Magnitt: “MENA HI 2021 Venture Investment Report.. In contrast, female founders receiving funding represented only 6 percent of the total VC and PE funding available in MENA4International Finance Corporation: “Moving Toward Gender Balance in Private Equity and Venture Capital,” 2019.. This is not just a missed opportunity; it’s a grave market fail.

When talking to women business owners, we often ask why fundraising is a challenge. Looking at their pace of growth, funding remains a critical constraint. The data reveals that the median female-led business receives 65 percent of the funding received by the median male-led business. Female founders tend to receive funding at the earlier stages from accelerators and incubators, then fall out of the arena in later (and larger) funding rounds. Male-led businesses are more likely to receive second-time funding than female-led businesses—17 percent versus 13 percent, respectively.

One often-cited limitation is, sadly, behavioral: “I’m not investor-ready”. Women are significantly more conservative in fundraising and avoid investors until they reach higher milestones in their businesses. Further challenges arise around where to meet with investors—here, culture plays an important role. Since most networking events happen during kids’ bedtime hours or over drinks, women in MENA tend to be excluded from the conversation. Social norms are one reason why women entrepreneurs are less likely to go after growth industries. One MENA female founder openly said on a roadshow, “I’d love to see male founders get asked: ‘Who’s taking care of the kids while you are fundraising?’” During due diligence, the founder of a last-mile delivery company was repeatedly asked, “But isn’t logistics too operations heavy for a woman?”

By and large, the anecdotes are many, and there is limited data to quantify the challenges. A few success stories do exist, placing some of MENA’s female founders in the spotlight, as was the case for the exit of the ecommerce platform Mumzworld or the acquisition of the events-management technology platform Eventtus by a US-based player. Speaking to women business leaders, each has battle scars to show and a common sentiment to share: “It was lonely. We rarely found women investors on the other side of the table.”

The VC and PE industries are still largely homogenous. Men comprise 90 percent and 85 percent of investment committees in both, respectively. That’s where decisions are being made and where the future of what our markets will look like is determined.

A mere 11 percent of senior investment professionals in emerging markets’ private equity and venture capital are women. Representation falls to 8 percent when excluding China and is only 7 percent in MENA. The picture demonstrates a major lag of 17 percent compared to female representation in business leadership within other sectors5Ibid..

Not only are few women found in the leadership of private-equity and venture-capital firms, but few women are in the leadership of the companies in which these firms invest. Just 20 percent of portfolio companies have gender-balanced leadership teams, and almost 70 percent are all male—even though, of the gender-balanced leadership teams in their portfolios, 87 percent have better decision-making, 61 percent show enhanced governance, and 60 percent have greater ability to serve larger, more diverse markets and consumers6Ibid..

Research confirms that the paucity of gender diversity is not good for business and financial returns. A Harvard Business Review study concluded that gender-diverse fund managers deliver an incremental 10 to 20 percent in returns compared to non-gender-diverse peers7Harvard Business Review: Study by Paul Gompers and Silpa Kovvali.. When VC firms increased female-partner hires by 10 percent, they saw 1.5-percent increases in returns for the overall funds and 9.7 percent more profitable exits.8International Finance Corporation: “Moving Toward Gender Balance in Private Equity and Venture Capital,” 2019.

An International Finance Corporation (IFC) study found that investing in gender-balanced leadership teams yielded 25 percent higher valuations. The median gender-balanced portfolio company was found to have a 64-percent increase in company valuation between two rounds of funding or liquidity events compared to 10 percent for imbalanced teams.

The imbalances in portfolio companies are correlated with the imbalances in investment managers’ leadership teams, since networks play active roles in sourcing investment opportunities and selecting senior management for portfolio companies.

Female partners were found to be twice as likely to invest in startups with one female founder and more than three times more likely to invest in a female CEO9Women in Venture Capital 2020 Report. According to a recent Harvard Business Review article, this is in line with the finding that VCs are much more likely to invest if they share the same gender or race as the founder.Without the equal representation of female investors, female founders will continue to be overlooked.

If the research unequivocally supports gender-balanced ecosystems, this is enough reason to turn the tide. We need to acknowledge that the barriers are real, and they range from closed networks, biases and inadequate commitment to gender diversity from allocators. To be overcome, a concerted effort is required from multiple stakeholders.

When it comes to perceptions on gender diversity, a disconnect exists between limited partners (LPs), who allocate capital to funds, and general partners (GPs), who manage a fund and invest the capital raised. According to the IFC study, 65 percent of LPs regarded the gender diversity of a firm’s investment team as important when committing capital to funds. However, GPs reported that less than 30 percent of their LPs emphasized gender diversity when making investment decisions. If only 25 percent asked about gender diversity during due diligence and even fewer made capital commitments conditional on gender outcomes, the pledge to diversity should be perceived as weak at best.

LPs who set clear gender-diversity goals for their investments and underscore diversity outcomes in due diligence send strong signals to GPs that the organization is committed to diversity. The goals then feed into GPs’ portfolio managers’ diversity targets. Fund managers would require gender-disaggregated data from their portfolio companies and commit to improving capital allocation to gender-balanced leadership teams. Reflecting diversity goals in their investment processes and portfolio management is a major action LPs can take towards closing the gender gap while maintaining or increasing returns.

The data demonstrates a clear correlation between the performance of gender-balanced investment teams and higher returns. Despite their vocal interest in diversifying their investment leadership teams, less than 10 percent of GPs have strategies for achieving it. It’s a perpetual cycle, as hiring is dependent on networks. With fewer women in investment leadership roles, there are fewer partners who can tap into the talent pool of junior and senior women who have paths to partnership. Similarly, subjective evaluation criteria such as “cultural fit” in a male-dominated industry place women at a disadvantage and feed the cycle. Committing to internal diversity targets for hiring and promoting female staff and managers levels the playing field and improves women’s access to the opportunities already available to their male peers.

As the research shows, investing in gender-balanced leadership teams yields higher valuation and returns. Yet, less than 40 percent of surveyed general partners track gender-disaggregated employment data, and only 33 percent actively pursue diverse candidates when sourcing talent for portfolio companies10International Finance Corporation: “Moving Toward Gender Balance in Private Equity and Venture Capital,” 2019.. Here again, a concerted focus on achieving gender-diversity outcomes is needed through GPs’ diversity tracking; playing an active role in making the business case for diversity and giving feedback on strategies will go a long way in achieving gender balance.

Accountability toward these actions allows LPs and GPs to make headway in closing the gender gap, generating employment opportunities and providing access to markets, which ultimately results in higher returns.

If you fish in the same pond, you will catch the same fish. Looking beyond the familiar comfort zone and making determined efforts for gender diversity and inclusion will result in growing opportunities across asset classes, investment strategies and geographies. Gender-balanced investors are empowered to deploy their resources within diverse teams and through innovative solutions, creating inclusive markets and bridging the wealth gap. The research on returns on investment is clear—it is worth the effort.

 

ABOUT THE AUTHORS

Nada Shousha is currently a Director on five regional and international companies’ boards as well as Vice Chair of the Egyptian-American Enterprise Fund. She is also an Advisor to the International Finance Corporation’s program Banking on Women. Until 2016, she was Regional Manager for Egypt, Libya and Yemen in the Middle East and North Africa Department of the IFC.

Amal Enan is the Chief Investment Officer of the American University in Cairo’s Endowment and Managing Director at Global Ventures. Prior to joining Global Ventures, Amal was the Executive Director of the Egyptian-American Enterprise Fund, and prior to that, she was part of a team of economists at the Macro-Fiscal Policy Unit in Egypt’s Ministry of Finance.

References

1 U.S. Securities and Exchange Commission: Diversity and Inclusion Report.
2 Fast Company: “Why it’s incredibly rare for companies led and founded by women to IPO,” Leslie Feinzaig, July 16, 2021.
3 Magnitt: “MENA HI 2021 Venture Investment Report.”
4 International Finance Corporation: “Moving Toward Gender Balance in Private Equity and Venture Capital,” 2019.
5 Ibid.
6 Ibid.
7 Harvard Business Review: Study by Paul Gompers and Silpa Kovvali.
8 International Finance Corporation: “Moving Toward Gender Balance in Private Equity and Venture Capital,” 2019.
9 Women in Venture Capital 2020 Report
10 International Finance Corporation: “Moving Toward Gender Balance in Private Equity and Venture Capital,” 2019.

Adblock test (Why?)



Source link

Continue Reading

Investment

These five things need changing in the investment world — including free trades – Financial Post

Published

 on


Peter Hodson: Investing should be rewarded, while trading should be discouraged

Article content

I have (hopefully) picked up a few tidbits of knowledge after about 40 years in the investment industry. But one of the reasons I love this business is that there is always something new to learn. No one will ever know everything about investing, and no one — and we mean no one — really has any idea what is going to happen in the markets tomorrow.

Advertisement

Article content

This makes a career in investments challenging and entertaining. There is never a dull moment. Still, here are five things I would change if I was in charge to make investing life a little more, well, predictable and fair.

Banish analyst price targets

Goldman Sachs this week cut its target on Twitter Inc. to US$62 and called it a “sell.” Why is this noteworthy? Well, in February, the same broker raised its target on Twitter to US$112 and called it a “buy.” In barely seven months, the target price was reduced by 45 per cent. Investors following Goldman’s logic would have gotten completely whipsawed.

Article content

Is Twitter so bad? Not really: the stock is up 11 per cent this year and 54 per cent in 52 weeks. But I really think target prices do a disservice to investors. Ignoring that most are wrong anyway, they encourage excessive trading and set up a case of FUD: fear, uncertainty and doubt.

Advertisement

Article content

Need more proof? How about this quote from an analyst’s report in 2011 on Amazon.com Inc.: “Despite Amazon’s outstanding fundamentals, its stock is overvalued and over loved.” The report had a US$125 per share target. Sure, it’s been a decade since then — not really that much time in market land — but Amazon today is US$3,446.

Change taxes to reward investing 

Let’s face it, taxes are going to go up in Canada. After all, we have to pay for all this pandemic spending, somehow. Right now, capital gains are taxed at 50 per cent. But it doesn’t matter if you hold a stock for five minutes or five years, your tax rate will be the same. Other countries have different methodologies, with some, such as the United States, having a higher tax rate if investments are held for a shorter time period. This makes sense to us, because investing should be rewarded, while trading should be discouraged.

Advertisement

Article content

If you’re day trading, you’re not really supporting any company. You’re just seeking quick profits. Buying shares in a company and holding them for years is harder, but, ultimately, more rewarding and should be encouraged by policy-makers.

A note to whoever wins the election next week: Tax the speculators and day traders, not the real investors who are beneficial to the country.

Rethink free trading

After sweeping across the U.S. these past few years, free stock trading has arrived in Canada, with several brokerages announcing commission-free trades this year. This sounds good, but it’s not as good as you think. We’re all for lower costs, but free trades really, really encourage excessive trading, which results in more taxes (see above) and lowers the amount of capital available to compound.

Advertisement

Article content

Volatile spikes in certain meme stocks have certainly increased because of zero trading costs. If we were in charge, we might ban free trades, but we might not have to if short-term trading taxes were increased. Essentially, we just want people to invest and not trade. After all, how many day traders do you see on all those world’s richest people lists? Answer: None.

Ban the phrase, ‘That stock is so expensive’

We’re kind of sick of how much we’ve heard this phrase this year. Many people are expecting a correction because stocks are so expensive based on historical metrics. Well, guess what? The buyers today obviously do not think stocks are expensive. They’re not buying with the expectation of losing money.

We chuckled after seeing Grit Capital’s recent thoughts on the Shiller P/E index, a measure of market valuation indicating the market’s valuation is 47 per cent higher than its 20-year average. Its comment sounded ominous, until it added that “following the famous P/E rule over the last 40 years, you would have owned equities for a grand total of 7 months (eye roll).”

Advertisement

Article content

Apply investor rules equally

If you are an accredited investor, you know how much of a pain the paperwork can be to invest in a hedge fund. The government wants investors to be protected, so it only lets rich investors access some products, on the thesis that they can take more risks. That’s all fine and great, and, at least in theory, makes sense. But what about extremely risky products that get regulatory approval and trade on stock exchanges? Nearly anyone can buy those, whether they are experienced, rich, young or whatever.

  1. Facedrive has been involved in many different types of businesses: ride sharing, food delivery and COVID-19 contact tracing, just to name a few.

    Five reasons Facedrive plummeted 91% in six months

  2. Smart investors know that most market crises are short-lived.

    Five lessons the pandemic has taught investors

  3. Follow these and with any luck you will set yourself up for a good retirement.

    Five keys to ensure you have a happy and prosperous retirement

  4. Worry only causes investors to focus too much on one thing, often at the risk of missing the big picture.

    Top five investor worries and 10 ways to solve them

Advertisement

Article content

Sure, brokers still have know-your-client rules, but an investor who calls themselves aggressive can go out and buy double- or triple-leveraged exchange-traded funds (ETFs) all day long. Let’s look at Direxion Daily Junior Gold Miners Index Bear 2X Shares, a leveraged ETF on junior golds. Its three-year annualized return is negative 82.1 per cent. How about the ProShares Ultrashort Bloomberg Natural Gas Index ETF? It’s down 80 per cent this year alone. If I were in charge, I might apply some new restrictions, or at least warning labels, on some of these investments.

Peter Hodson, CFA, is founder and head of Research at 5i Research Inc., an independent investment research network helping do-it-yourself investors reach their investment goals. He is also associate portfolio manager for the i2i Long/Short U.S. Equity Fund. (5i Research staff do not own Canadian stocks. i2i Long/Short Fund may own non-Canadian stocks mentioned.)

_____________________________________________________________

 If you liked this story, sign up for more in the FP Investor newsletter.

_____________________________________________________________

Advertisement

In-depth reporting on the innovation economy from The Logic, brought to you in partnership with the Financial Post.

Comments

Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.

Adblock test (Why?)



Source link

Continue Reading

Investment

Olaf Carlson-Wee’s Polychain Capital Co-Leads $230 Million Investment In Ethereum Challenger Capitalizing On DeFi – Forbes

Published

 on


Ethereum challenger Avalanche has raised a $230 million investment led by Singapore-based hedge fund Three Arrows Capital and Olaf Carlson-Wee’s Polychain Capital (Carlson-Wee was the first employee at now the largest cryptocurrency exchange in the U.S., Coinbase, and ultimately led its risk management).

Announced today, the capital raise, conducted as a private sale of the platform’s AVAX token, closed in June and also included investors such as R/Crypto Fund, Dragonfly, CMS Holdings, Collab+Currency, Lvna Capital as well as a group of angel investors and family offices. Similar to initial coin offerings (ICOs) that raised over $20 billion from the public a few years ago, this fundraising mechanism allows blockchain projects to raise capital from accredited investors in exchange for cryptographic tokens. Last year, the project raised approximately $60 million through token sales from prominent venture firms including Andreessen Horowitz (a16z) and Initialized Capital. 

The Singapore-based non-profit Avalanche Foundation, which oversees the blockchain’s ecosystem, will use the funds to subsidize projects building decentralized finance (DeFi), enterprise, and other applications developed on the Avalanche blockchain. The support will include grants, token purchases and other forms of investment, according to Emin Gün Sirer, the founder of the project and director of the foundation.

The investment comes as a number of similar networks dubbed “Ethereum killers”, including Solana, Algorand, Cardano and Polkadot, have exploded in value over the past year and shows a continued appetite for innovation beyond the original blockchain that popularized smart contracts and enabled the next generation of decentralized applications.

“When you have a war chest like this, it’s a very comfortable situation to be in,” says Sirer. “We will certainly have partnership announcements coming up. I am really excited about the new unique deployments that are already in the pipeline.” Sirer also told Forbes that he had recently stepped down from his teaching position at Cornell University to focus on Avalanche. 

Conceived in 2018, the platform claims to process transactions hundreds of times faster than its competitor, more than 4,500 transactions per second vs. Ethereum’s 14, for a fraction of Ethereum’s fees. Commonly known as gas, transaction fees on Ethereum have skyrocketed earlier this year due to the high on-chain activity, peaking near $70 in May. 

Avalanche’s main network launched in September 2020 and has since claimed a stake in the swelling market. Over 225 projects are building on the platform, and the total amount of assets locked in Avalanche’s DeFi ecosystem, encompassing peer-to-peer exchanges and lending applications that operate without intermediaries, grew at the end of last month to over $1.6 billion from about $250 million in mid-August. Avalanche’s AVAX token, 14th largest cryptocurrency with a market capitalization of $13.13 billion, more than doubled in price, reaching an all-time high of $66.45 earlier this week, Messari’s data shows. 

Much of that growth can be attributed to the launch of the “Avalanche Rush” initiative, announced on August 18. Over the next few months, the program will inject $180 million worth of AVAX into the Avalanche ecosystem with the aim to lure blue-chip DeFi applications to the network by providing the tokens as liquidity mining incentives for users of protocols like Aave, which facilitates cryptocurrency lending, and decentralized exchange Curve, though additional integrations may follow. “We’re in talks across the board with every single category of DeFi projects you might imagine,” Sirer says. 

As the program kicked off following the introduction of the Avalanche Bridge, a technology that enables the transfer of assets between blockchains, namely Ethereum, market watchers, including Joseph Young and Nick Chong, authors of the DeFi-focused Forbes newsletter Alpha Alarm, noted the resemblance of Avalanche’s growth with Polygon, a platform for Ethereum scaling and infrastructure development. Many Ethereum-native DeFi applications, including the money market protocol Aave, have migrated to Polygon to escape Ethereum’s rising transaction fees due to the network’s congestion. 

Yet Avalanche is also capitalizing on the burgeoning popularity of non-fungible tokens. On August 11, it was revealed that legacy trading cards and collectibles company Topps partnered with Avalanche to build a marketplace for NFTs and launched the first collection featuring highlights from the German football league’s 2020–2021 season. A few days later, however, it became known that Major League Baseball, Topps’ major partner for 70 years, is ending its licensing agreement with the company in favor of a deal with the up-and-coming sports collectible brand Fanatics. But Sirer says Avalanche has more in store: “We are a big believer in NFTs and their future, and we plan to grow in that area in many different ways.”

Adblock test (Why?)



Source link

Continue Reading

Trending