Redwood Materials, founded by former Tesla CTO JB Straubel, is a promising battery recycling startup that has attracted significant investor interest. As electric vehicles continue to gain market share, Redwood provides a solution to recycle EV batteries and recover critical battery materials like lithium and cobalt for reuse. With plans to scale up rapidly in the coming years, Redwood Materials represents an intriguing investment opportunity. This article will explore three ways investors can gain exposure to this leading battery recycling company.
Invest in redwood materials through a private equity round
The most direct way to invest in Redwood Materials is to participate in one of its private fundraising rounds. Redwood has raised over $700 million so far across several rounds of funding from leading VCs like T Rowe Price, Goldman Sachs, Baillie Gifford, and Bill Gates’ Breakthrough Energy Ventures. As the company continues scaling up its recycling plants and operations, it will likely raise additional private capital in late 2022 or 2023. Qualified individual and institutional investors can seek allocations to these private rounds through their VC relationships or investment banks.
Purchase redwood materials stock once it goes public
Redwood Materials has not yet gone public, but eventually plans to have an IPO once it reaches sufficient scale. Many investors expect Redwood will IPO within the next 2-4 years given its rapid growth trajectory and large market opportunity in EV battery recycling. When Redwood does decide to go public, everyday investors will have the opportunity to purchase stock in the company during its IPO process. Leading up to the offering, investors should closely follow news and filings around any Redwood IPO plans.
Invest in public companies with partnerships or investments in redwood
Until Redwood Materials eventually pursues an IPO, investors can gain exposure to the company by investing in some of its public partners and backers. For example, electric vehicle leader Tesla is an investor in Redwood and also supplies used battery packs to Redwood for recycling. Panasonic has also announced plans to work with Redwood on battery recycling. By investing in Tesla, Panasonic, or other Redwood partners that stand to benefit from its growth, investors can make a bet on the battery recycling firm. However, these investments offer more indirect exposure compared to owning Redwood equity directly.
Redwood Materials is a compelling investment opportunity as the leader in recycling EV batteries to recover materials for reuse in new batteries. Investors have a few options to gain exposure including participating in a private fundraising round, buying Redwood IPO shares when available, or investing in public companies partnered with Redwood.