ShawKwei commits $34m to US EV battery manufacturer

The target company is already well-funded, having closed a USD 614m Series C funding round last year. It was described as one of the 10 largest climate technology financings globally in 2022.

The first tranche of USD 400m was led by Porsche and featured Ontario Municipal Employees Retirement System (OMERS), Decarbonization Partners, Riverstone Holdings, Vsquared Ventures, and Moore Strategic Ventures. A follow-on of USD 214m came from Microsoft Climate Innovation Fund, Lightrock Climate Impact Fund, Oman Investment Authority (OIA), Molicel, and Moore Strategic.

Group14’s other backers include Decarbonization Partners, BASF, Cabot Corporation, Resonac, and SK Materials. Resonac is a Japanese chemicals and industrial materials giant formerly known as Showa Denko, while SK Materials is a subsidiary of Korea’s SK Group.

Established in 2015, Group14 produces advanced silicon battery technology for lithium-ion batteries used in electric vehicles (EVs) and electronic products and devices. It uses anodes made of silicon instead of the more common graphite, which allows for higher energy density and faster charging times. Using silicon instead of graphite also means there is less reliance on imports from China.

The company’s patented silicon-carbon composite technology is already shipping from its first factory in Washington state to lithium-ion battery producers around the world, according to a statement. A second US-based commercial-scale factory is currently under construction in Washington and a joint venture facility – run in conjunction with SK Materials – has been commissioned in Korea.

ShawKwei’s connection to Group14 comes through the latter’s acquisition of Schmid Silicon Technology from Germany-headquartered Schmid Group in July. The deal gave Group14 access to a secure supply of ultra-high-purity and low-carbon silane gas, which is essential to the production of its battery technology.

ShawKwei invested USD 40m in Schmid Group in 2014. Earlier this year, the company announced plans to list on the New York Stock Exchange via a merger with Pegasus Digital Mobility Acquisition Corp, a special purpose acquisition company (SPAC) focused on next-generation transportation.

"Our investment into Group14 follows the successful exit from ShawKwei’s investment with Schmid Silicon and its related group companies. We see efficient and fast-charging batteries as critical to the clean energy transition in Asia as well as the USA and Europe,” said Kyle Shaw, a founder and managing partner at ShawKwei.

Prior to this month, Shaw’s most recent acquisition in the US was in the 1990s. He completed the deal that made his name in the same decade: a carve-out of contract electronics manufacturer Flextronics International’s Asian division, where the investment thesis was linked to a relocation of manufacturing from the US to China to take advantage of lower labour costs.

Shaw’s re-engagement with US-based assets – through ShawKwei’s investments in decontamination and waste-reducing technology provider ZymeFlow, beauty packaging maker CTL Packaging USA, and Group14 – demonstrates how the dynamics have shifted.

“Given US-China decoupling, tariffs, and the desire of customers to reorient supply chains out of China, there is an opportunity for manufacturing and industrial services in North America and Europe, he told AVCJ after announcing the first two deals.

“Labour is more expensive in China than it was 30 years ago, when I bought Flextronics, but the clincher is robotics. I cannot emphasise enough how often I see robotics in factories that we’re interested in. And the pricing has come way down. You can almost get a 12-month payback on robotic equipment, and it will last several years, giving you better quality and consistency.”

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• Topics
• North America
• Expansion
• Cleantech
• Asia
• ShawKwei & Partners
• USA
• energy storage
• Electric Vehicles
• manufacturing