Startups haven\u2019t been sitting this one out either. In the past few quarters, a growing roster of venture-backed companies has secured funding for areas including battery and magnet recycling, rare earth-focused mining technology, and even extracting materials from space.<\/p>\n
Collectively, they\u2019ve raised billions to date, including some large recent rounds. To illustrate, we used Crunchbase data<\/a> to put together a list of a dozen companies, most funded in the past year, with a mission of supplying scarce materials through recycling or at their original source.<\/p>\n The largest investment recipients are focused on recycling, looking to extract scarce materials from devices, scrap, batteries and industrial machines no longer in use.<\/p>\n In this arena, the two most heavily funded startups \u2014 Massachusetts-based Ascend Elements<\/a> and Nevada-based Redwood Materials<\/a> \u2014 are both focused on batteries and have been around a while. Together, they\u2019ve pulled in nearly $3 billion in equity funding and over $1 billion in debt financing to date.<\/p>\n Notably, however, both companies secured most of their funding between 2021 and 2023. That coincided with a more bullish period overall for cleantech equity funding. Since then, sustainability-focused investment has trended lower<\/a>, with U.S. investors in particular seeing impacts from the Trump<\/a> administration dialing back support for clean energy initiatives.<\/p>\n Outside the U.S., meanwhile, we\u2019ve seen some more recent, sizable rounds around critical materials recycling.<\/p>\n Out of Canada, Cyclic Materials<\/a> announced<\/a> in June that it raised $25 million to build a rare earth recycling facility in Kingston, Ontario. It will take magnet-rich scrap and retired industrial products to recycle rare earth elements used in EV motors, wind turbines and consumer devices. Per Cyclic, it\u2019s an undertapped market, as today, less than 1%<\/a> of rare earth elements are recycled.<\/p>\n On the earlier-stage side, two German companies also raised good-sized financings. Cylib<\/a>, which develops technology to draw critical raw materials from end-of-life batteries, picked up a $64 million Series A last spring. And at seed-stage, Munich-based Tozero<\/a> secured $12 million for a plant to recover raw materials from recycled lithium-ion batteries.<\/p>\n Startup capital is also flowing to ventures focused on mining critical materials.<\/p>\n Before looking at the latest funding picks, however, it seems worth pointing out that MP Materials<\/a> \u2014 the company generating headlines of late around rare earth mining \u2014 is itself a stock market success story with some Silicon Valley roots.<\/p>\n Shares of Las Vegas-based MP shot higher this month following news that the U.S. Defense Department<\/a> agreed to buy an equity stake in the company, which operates the country\u2019s only rare earth mine in Mountain Pass, California. A few days later, Apple<\/a> announced<\/a> a $500 million commitment to buy rare earth magnets developed at an MP Materials\u2019 facility in Fort Worth, Texas.<\/p>\n Notably, MP was one of the earlier companies to ride the SPAC boom, making its public market debut<\/a> in 2020 through a merger<\/a> with a blank-check company. The deal included an equity investment from backers including venture capitalist and onetime \u201cSPAC king\u201d Chamath Palihapitiya<\/a>.<\/p>\n More recently, we\u2019ve seen a few startups nab venture and debt financing around mining efforts and technologies targeting scarce metals.<\/p>\n Montreal-based Torngat Metals<\/a> secured<\/a> $120 million in debt financing last month from government sources for a rare earth mining project<\/a> in Strange Lake, located in Quebec\u2019s northernmost region. It touts the project, which includes \u201cdetailed caribou avoidance procedures,\u201d as a strategically important national initiative in a time when Chinese domination of heavy rare earth metals threatens others\u2019 ability to build and source high-performance magnets.<\/p>\n Phoenix Tailings<\/a>, based in Woburn, Massachusetts, also attracted investors\u2019 interest, pulling in $76.4 million in fresh financing this year, per a May securities filing<\/a>. The company has developed a process to extract valuable metals and rare earth elements from mining waste.<\/p>\n Major U.S. market indices are trading near all-time highs these days, so it\u2019s looking like a good time for public companies in a lot of industries. But those tied to sourcing of rare metals and battery materials are riding particularly high.<\/p>\n MP Materials, for instance, had a recent market cap around $10 billion \u2014 its highest to date. Rare earth stocks more broadly are also sharing in the enthusiasm<\/a>.<\/p>\n Could IPOs and acquisitions for the most heavily funded companies tied to sourcing scarce materials be next? These aren\u2019t likely to be the fastest-moving spaces for dealmaking, but at least for now some momentum is on their side.<\/p>\nMost venture money going to recycling<\/h2>\n
Mining attracts capital too, following MP Material\u2019s footsteps<\/h2>\n
Exits next?<\/h2>\n
Related Crunchbase query:<\/h2>\n
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