Battery pack manufacturing and recycling startup Lohum Cleantech to raise $100 million in Series B funds, Auto News, ET Auto

 Battery pack manufacturing and recycling startup Lohum Cleantech
Battery pack manufacturing and recycling startup Lohum Cleantech

Battery pack manufacturing and recycling startup Lohum Cleantech is looking at raising $100 million in Series B funds to increase capacity in the Indian market and also set up facilities in Europe and the US, its founder said.

The funds raised will be used to increase recycling capacity to 1 million units per annum, said Rajat Verma, who is also the chief executive of the Uttar Pradesh-based company. He expects to close the financing round in the next three-four months.

Lohum has a capacity for recycling 100,000 battery packs at its manufacturing facility in Greater Noida. It also assembles 200,000 two-wheeler battery packs at the unit.

“We will be going out for what we will be formally calling a Series B in the next few months. Part of that funding will be to increase capacity within India, both on the battery pack manufacturing and recycling side,” said Verma. “Additionally, we will set up capacity in Europe and US, primarily on the recycling side.”

Lohum has started scouting for a new location to expand capacity within the country.

It has raised $15 million so far. Baring Private Equity Partners had led the first institutional round of investment in the company that fetched $7 million (Rs 51 crore).

The battery pack manufacturer assembles lithium-ion batteries from cells imported from countries including China and Taiwan. The batteries are used for applications like EVs as well as for stationary energy storage solutions (ESS), like in telecommunication towers.

It also recycles end-of-life batteries to separate materials like lithium, cobalt and nickel. The company has developed proprietary technology to test whether an end-of-life battery could be repurposed for other applications or needs to be recycled.

“India is very sweetly positioned for a recycling market. The global ecosystem is being led by the car category. So if the ecosystem started maturing in 2019, you will see cars coming back in the 2025/2026 timeframe,” said Verma, adding that these emerging trends have encouraged the company to build extra capacity.

About 60-70% of the company’s revenue is generated from sale of batteries, 15-20% from reuse and 15% from the recycling business. Verma expects the battery recycling business to grow to account for half of the firm’s revenue in the next three years.

As electric vehicle sales in the country take off, battery recycling is expected to become a lucrative opportunity, especially given the fact that India does not have reserves of rare metals like lithium, cobalt and nickel.

“The critical thing why we believe in this ecosystem is because without access to raw materials, you will always be pressured on the margin side. So when we started Lohum, our thesis was how do we make India stronger on the raw material side, bring more lithium, cobalt, nickel to the market (without access to ores from mines),” said Verma.

Lohum is also testing its batteries with several automakers for electric three-wheelers and other larger vehicles.

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