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Tozeroa Munich-based startup that recovers valuable raw materials from recycled lithium-ion batteries, is preparing to expand. The startup has just closed an oversubscribed seed round of €11 million (about $11.7 million) to ramp up production by building its first industrial sawmill (AKA first-of-its-kind, or FOAK).
Currently, Tozero’s pilot plant processes nine tons of waste lithium-ion batteries per day, but the startup is seeking unlimited capacity in what it hopes will be just another two years of scaling its business.
“Other competitors are raising more money to get to the manufacturing facility. But since our process and technology are simple and efficient, we don’t need more to get to our first industrial deployment, or what the investor world calls a ‘first of its kind’ plant,” said co-founder and CEO “This is what we aim to build,” Dr. Sarah Fleischer (pictured above, left) told TechCrunch.
Once Tozero’s process reaches industrial pace and functionality, the startup says there will be no strict limits to what it can achieve in battery recycling as long as it can continue to reach waste streams.
“The purpose of FOAK is really to get into proper continuous production – manufacturing – of the product,” added Dr. Ksenija Milicevic Newman, co-founder and managing director.
“After that, unlimited and unlimited exponential growth becomes possible,” Fleischer claimed. “Our idea is to operate factories ourselves all over the world. We are focusing on Germany, on Europe, and then we will go to North America. But after we get to the FOAK factory, we can expand Tozero on multiple dimensions around the world. So this will be a major milestone for the next phase.” following growth.
The startup pointed to expectations that global demand for lithium is… It is expected to quadruple to 3.1 million metric tons by 2030, driven by the rapid adoption of electric vehicles and the growing need for large-scale renewable energy batteries. In context, lithium mining production produced only 180,000 metric tons last year, so recycling will have a crucial role in serving this demand.
the EU Battery Directive It will also make it necessary to recover at least 80% of lithium from batteries by 2031.
“The technology works…so the core part of our technology is already installed. Now we just have to industrialize it,” Fleischer said.
Breaking down recycling bottlenecks
The startup addresses bottlenecks in lithium battery recycling with Water based carbonation A more environmentally friendly extraction process than traditional metal thermal processing (smelting). Its method of recovering lithium also does not require the use of harsh acids, as is the case with other battery recycling processes.
Tozero says her method also results in much lower emissions — 70% fewer — than mining.
“The security of raw materials is national security in a way,” Fleischer said. “There are a lot of underserved industries here in Europe that are starving for this material because Europe is not producing lithium carbonate. We are importing. If you look at (European Commission President) Ursula von der Leyen, she makes statements that we are importing more “Of the lithium carbonate, 97% is from China so we are very dependent on the Eastern Front and mining industries.”
Access to black mass, the byproduct of mechanical recycling of lithium batteries processed by Tozero, is not restricted across borders. On the competition front, Fleischer describes this as an “all-blue ocean market,” with battery recycling efforts mostly focused elsewhere. The startup says it can use the black mass from any type of lithium-ion battery so that waste streams can be mixed.
“Lithium will always be inside[batteries destined for recycling]but the other elements are changing — with innovations in battery manufacturing — so we don’t care if there’s nickel, or if it’s a little less or more, for example,” Milicevic-Newman said. “Cobalt, but lithium is always there.”
Tozero also recovers graphite from black mass waste streams. The startup says its focus on these two important raw materials represents a “key differentiator” compared to other players in the battery recycling space.
The focus on lithium is also the reason the startup is attracting customers to its door.
“Customers are jumping in,” Fleischer said, describing market demand as “very high” for many industrial use cases in Europe. Tozero has amassed customers worth “over $1 billion in purchases who are eager to source our materials,” she said.
Tozero has delivered the first batch of high-purity recycled lithium to commercial customers This Aprilnine months after opening Experimental facility In Germany.
Need for speed
Tozero was only founded in 2022, so how have they been able to achieve something that bigger players in the space clearly haven’t been able to achieve over the past two decades? The startup says it boils down to intense focus, speed and creative thinking.
Speed requires being creative when building hardware, Fleischer said, explaining that the biggest challenge hardware startups face is the issue of delivery times to obtain the equipment needed to scale.
“We break things quickly, learn, iterate, and improve at a very fast pace — maybe like Elon Musk’s SpaceX principle — just build things and see (what happens) until things break, learn from them, iterate and improve exponentially — it’s sprints,” Fleischer said. “This is very unusual for hardware companies.”
“I would say we protect ourselves quickly,” she added, stressing that Tozero’s approach relies on “process innovation” that is protected as a trade secret, despite not being patented. She added: “The whole process, the steps or standards, the arrangement, how we do specific things, this is our Coca-Cola recipe (trade secrets).”
Tozero believes it can expand its approach to recover other raw materials that can be used as “energy sources,” although it has not specified what materials it could add next.
The overall mission is to achieve zero waste of important raw materials. “We are very aware of (the broader challenges involved in decarbonizing in a sustainable way),” Milicevic-Newman told TechCrunch. “So we also want to focus on recycling some other materials in the future as well.”
But if it wanted to make a real impact, wouldn’t Tozero have to license its trade secrets to others? The couple say they haven’t fully decided on their approach, but prefer to retain control of the process as they expand – although they are open to partnerships.
“On the operational side, we believe we can only provide the highest quality if we operate the plants ourselves,” Fleischer said. “And that could also be with partners. I mean we’re open to that. So I don’t want to say ‘yes’ or ‘no’ to licensing. Partnerships are great on a large scale, if they’re beneficial, but we’ll be running our factories ourselves.
NordicNinja led Tozero’s seed round, with participation from new investors In-Q-Tel (US Public-Private Strategic Fund), Honda, and global infrastructure engineering giant JGC Group. The €3.5 million pre-seed round, which closed about two years ago, was led by Berlin-based Atlantic Labs. To date, Tozero has raised €17 million, including a €2.5 million grant from the EU’s R&D support arm, the European Innovation Council.
“Tozero’s innovative approach to battery recycling is exactly what Europe needs to secure key supplies in the global electrification race and Japan wants to collaborate,” Shane Nikoni, co-founder and managing partner at NordicNinja, said in a statement. “Sarah and Ksenia, our exceptional founders, have the experience and drive to shift the landscape towards sustainable battery solutions. We are excited to support the tozero team in scaling their technology and business processes and contributing to a more sustainable and independent energy future for all.”
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