Chinese EV battery maker and storage solutions provider SVOLT Energy Technology has raked in 10.28 billion yuan ($1.6 billion) in a Series B round just five months after the completion of its big-ticket Series A round.
The new round was led by Bank of China Group Investment (BOCGI), a Hong Kong-incorporated direct investment arm of Bank of China (BOC).
Other investors include the sub-funds of China’s National Fund for Technology Transfer and Commercialisation, Country Garden Venture Capital, Shenzhen Capital Group, CCB Investment, IDG Capital, Sany Heavy Industry, Xiaomi Corporation, Oceanpine Capital, and China Renaissance, among others. Existing shareholders including SDIC, and JZ Capital re-upped in the round.
Investors were “extremely enthusiastic” about making commitments to the Series B round, Yang Hongxin, chairman and CEO of SVOLT, was cited as saying at the round’s signing ceremony in a company statement.
SVOLT was started in 2012 as part of Chinese automaker Great Wall Motors and later developed into the firm’s battery business unit in late 2016 before it spun off from the parent firm in 2018 to become an independently operated company.
Headquartered in eastern China’s Jiangsu Province, the firm specialises in high-speed stacking process, cobalt-free batteries, long-lifespan solid-state batteries, and artificial intelligence (AI)-enabled automotive-qualified intelligent manufacturing. It has seven R&D centres in Japan, South Korea, the US, India, as well as Wuxi, Baoding, and Shanghai, in China.
The firm has over 3,100 employees, including 1,400 R&D professionals. It plans to spend a total of more than 26 billion yuan ($4 billion) on the construction of new factories worldwide by 2025, according to its website.
The proceeds will fund the firm’s R&D of new technologies and construction of new factories in Europe, as well as in Chinese cities like Changzhou, Suining, Huzhou, Ma’anshan, and Nanjing. Its production capacity is expected to exceed 200GWh in 2025.
The Series B round is the largest financing that SVOLT has raised to date. The funding comes on the back of the firm’s Series A round in February, when it secured 3.5 billion yuan (about $541.7 million) led by BOCGI and Chinese private equity (PE) firm CMG-SDIC Fund management.
Prior to that, the startup closed 1 billion yuan ($154.8 million) in a strategic investment from CMG-SDIC Fund management in April 2020. The round valued SVOLT at 8.2 billion yuan ($1.3 billion).
Yang said that SVOLT is building a carbon footprint system, which aims to track and manage the firm’s total greenhouse gas emissions, to help it achieve carbon neutrality targets and sustainable development requirements.
As one of the biggest funding rounds into a privately held company in China, the deal underscored investors’ confidence in the future potential of China’s EV battery market. The market has turned into a strategic industry riding on a tailwind of the government’s commitment to significantly reducing carbon dioxide emissions in the coming decades.
China, the world’s biggest source of greenhouse gas, is targeting to become carbon neutral before 2060, President Xi Jinping had said last year.