SAN FRANCISCO, Jan 28, 2026, 07:04 (PST)
- Redwood Materials announced the close of a $425 million Series E funding round, bringing Google on board as a new investor.
- This round builds on the $350 million raised in October as Redwood doubles down on energy storage solutions for data centers.
- Axios reported that Google’s stake in the extension is roughly $75 million.
Redwood Materials announced Wednesday it secured $425 million in a Series E funding round, bringing Alphabet’s Google on board as a new investor in its battery recycling and energy storage efforts. While the company hasn’t revealed its valuation, media sources estimate it tops $6 billion. 1
The deal comes amid a spike in electricity demand fueled by AI data centers, pushing utilities to rethink firm power, backup options, and storage solutions. NextEra Energy revealed this week it’s deep into talks to provide an extra 9 gigawatts for data centers, highlighting the rapid expansion of this market. 2
Redwood plans to put the fresh capital toward speeding up its energy storage platform and expanding its recycling and critical minerals operations. The company argues that U.S.-made storage offers a solution to reduce dependence on imported LFP (lithium iron phosphate) batteries. It also emphasized that energy storage has become essential as power demand ramps up. 3
Google chipped in roughly $75 million during a Series E extension, Axios reported. These late-stage rounds usually focus on scaling the business instead of validating the core product. 4
The company closed a $350 million round in October, led by Eclipse, with Nvidia’s NVentures also joining, TechCrunch reported. Redwood claims it recycles over 70% of used or discarded battery packs across North America. Some of these are repurposed into microgrids for data centers via its Redwood Energy division. It aims to roll out 20 gigawatt-hours (GWh) of grid-scale storage by 2028. 5
Founded in 2017, Redwood started out recycling lithium-ion batteries to recover metals like lithium, cobalt, and nickel. Since then, it has branched into energy storage systems designed to back up the grid and power data centers. The company works with names such as Volkswagen, Panasonic, Toyota, and Lyft, according to a previous report by Reuters. 6
Latitude Media reported that Redwood is offering fixed-capacity storage by swapping out worn-out battery packs to maintain consistent output. They’re also using software to combine batteries from various vehicles into one unified system. CTO Colin Campbell described the energy division as a “detour,” adding, “We don’t have to choose” between storage and recycling. The outlet noted the company still depends largely on manufacturing scrap for its recycling feedstock and has encountered delays and layoffs while trying to scale up. 7
The data center storage market is packed, and Tesla stands out as a top supplier of large battery systems. In the latest quarter, Tesla rolled out 14.2 GWh of energy-storage products. Baird analyst Ben Kallo told MarketWatch this segment could be the company’s “highlight” when it announces earnings. 8
Repurposing used EV batteries for dependable data-center power remains a gamble. The availability of suitable second-life packs, rigorous safety checks, and shifts in new battery prices all affect the financials — and clients won’t stick around if projects drag on with siting, permitting, or grid connection delays.
