Tozero, a Munich-based startup that recovers valuable raw materials from recycled lithium-ion batteries, is preparing to scale up. The startup just closed an oversubscribed seed round of €11 million (approximately $11.7 million) to build its first industrial deployment (also known as first-of-its-kind or FOAK) plant and ramp up production.
Currently, Tozero's pilot plant processes 9 tons of lithium-ion battery waste per day, but the startup is aiming for unlimited production capacity with the hope of expanding its operations in the next few years. .
“Other competitors are raising even more money to get to their factories. But our processes and technology are so lean and efficient that we are able to make the first industrial deployment, or We don't need anything more to arrive at what the world calls the “first” plant. That’s what we aim to build,” co-founder and CEO Dr. Sarah Fleischer (pictured above, left) told TechCrunch.
Once Tozero's process reaches industrial pace and capabilities, the company says there are no hard limits to what it can accomplish with battery recycling, as long as it can continue to access the waste stream.
“The real aim of FOAK is to start the proper serial production, or manufacturing, of our products,” added Co-founder and Managing Director Dr. Ksenija Milisevich Neumann.
“After that, unlimited, unlimited, exponential growth is possible,” Fleischer argued. “Our idea is to run our own factories all over the world. We will focus on Germany and Europe and then go to North America. But once we get there [FOAK] Factories allow Tozero to scale across multiple dimensions around the world. Therefore, it will be an important milestone towards the next stage of growth. ”
The company pointed to forecasts that global demand for lithium is expected to quadruple to 3.1 million tonnes by 2030 due to the rapid adoption of electric vehicles and growing demand for large-scale renewable energy batteries. . By comparison, lithium mines produced just 180,000 tonnes last year, so recycling will play a key role in meeting that demand.
The EU's Battery Directive requires that at least 80% of lithium be recovered from batteries by 2031.
“The technology works… so the core of our technology is already established. We just need to industrialize it,” Fleischer said.
Eliminate recycling bottlenecks
The startup is tackling the bottleneck in lithium battery recycling using a water-based carbonation recovery process that is more environmentally friendly than traditional pyrometallurgy (smelting). That method of recovering lithium also doesn't require the use of strong acids, as is the case with other battery recycling processes.
Tozero says its method produces significantly lower emissions than mining, by 70%.
“The safety of raw materials, that's national security in a sense,” Fleischer said. “Here in Europe, we have so many underserved industries that are hungry for the material because lithium carbonate is not produced in Europe. We are importing it. If you look at it. [European Commission president] Ursula von der Leyen said that more than 97% of its lithium carbonate is imported from China. Therefore, we rely heavily on the Eastern Front and the mining industry. ”
Access to the black mass, a byproduct of mechanical recycling of lithium batteries, processed by Tozero is not restricted across national borders. And in terms of competition, Fleischer describes this as “a completely blue ocean market,” with battery recycling efforts largely focused elsewhere. The company says it can use black mass from all types of lithium-ion batteries, allowing it to mix waste streams.
“Lithium is always inside.” [the batteries for recycling]But other elements are changing due to innovations in battery manufacturing, so I don't care if nickel is present or not, or if cobalt is a few percent less or more, but lithium will always be there,'' Milicevic said. Neumann said. .
Tozero also recovers graphite from black bulk waste streams. The company says its focus on these two key raw materials is a “key differentiation” from other battery recycling companies.
The focus on lithium is also why the startup is gaining customers.
“Customers are flocking to this location,” Fleischer said, arguing that market demand is “too high” for many industrial applications in Europe. Tozero is attracting “more than $1 billion worth of offtake customers who want our materials,” she said.
Tozero delivered its first batch of recycled high-purity lithium to commercial customers in April this year, nine months after opening a pilot facility in Germany.
need for speed
Tozero was only founded in 2022, but how did it accomplish what the big players in the space clearly haven't been able to do for the past 20 years? , says that it's all about thinking creatively.
Being fast requires creativity when building hardware, Fleischer argues, and the biggest challenge for hardware startups is the turnaround time to get the equipment needed to scale. I explained that it is.
“We break things down quickly and learn, iterate, and improve at a very fast pace. Probably the same principle as Elon Musk's SpaceX. Just build things and see what happens. . [what happens] “Until things break, you learn from them and iterate and improve in very fast sprints, which is very foreign to hardware companies,” Fleischer said.
“I would say we protect ourselves with speed,” she added, acknowledging that Tozero's approach is based on “process innovation” that is not patented but is protected as a trade secret. “The whole process, the steps and the parameters, the order, how we do certain things, that's completely our 'Coca-Cola.'” [trade secret] Recipes,” she added.
Tozero believes it can expand its approach to regenerate other raw materials that can be used as “energy sources,” but did not say which materials it might add later.
Our most important mission is to eliminate waste of critical raw materials. “We are fully aware that [the broader challenges entailed in decarbonizing in a sustainable way]” Milicevic-Newman told TechCrunch. “Therefore, we would like to focus on recycling other materials in the future.”
But if Tozero really wants to make an impact, shouldn't it license its trade secrets to others? The pair said they haven't fully decided on their approach, but are open to partnerships but want to maintain control of the process as they scale.
“Operationally, we believe we can only truly provide the best quality if we run the factory ourselves,” Fleischer said. “This is also true for our partners. I mean, we're open to it. So I don't want to say 'yes' or 'no' to licenses. Partnerships are great for scaling if they help, but we intend to run our own factories. ”
Tozero's seed round was led by NordicNinja, with participation from new investors In-Q-Tel (a US strategic public-private fund), Honda, and global infrastructure engineering giant JGC Group. The startup's €3.5 million pre-seed round, which closed nearly two years ago, was led by Berlin-based Atlantic Labs. So far, Tozero has raised €17 million, including a €2.5 million grant from the European Innovation Council, the EU's research and development agency.
“Tozero's innovative approach to battery recycling is exactly what Europe needs to secure a key source of supply in the global electrification race,” NordicNinja co-founder and managing partner Shin Nikuni said in a statement. Japan is also willing to cooperate.” “Sara and Kseniya, two outstanding founders, have the expertise and drive to transform the landscape towards sustainable battery solutions. We are excited to see the tozero team expand its technology and commercial operations. We are excited to help contribute to a more sustainable and independent energy future for everyone.”