European energy investor steps in to support Northvolt: "We’re helping the party – significantly"

Northvolt, Sweden’s troubled battery company, is currently in discussions with various financiers to close the critical funding round needed to keep operations going. 

According to multiple reports in international media, the firm has secured SEK 1.7 billion (approx. $150 million USD).

But until recently, no-one, apart from the firm’s co-founder Harald Mix, had publicly confirmed their participation in this funding round. However, it's now clear that one of Northvolt’s previous investors, EIT InnoEnergy, will be injecting additional capital.

“We began supporting Northvolt financially and with services back in 2018, and we’ve been there every step of the way,” said Diego Pavía, EIT InnoEnergy's CEO, speaking to Impact Loop at the VC firm’s energy conference, The Business Booster, in Barcelona.

“Now, with Northvolt facing challenges, we’ll be there to support them both financially and with other resources,” he said during our interview.

EIT InnoEnergy is a venture capital company initially founded and funded by the European Institute of Innovation and Technology (EIT), an EU agency focused on driving innovation across Europe. Today, however, the funding dynamics have shifted, with private investors—comprising financial institutions and industrial heavyweights—now providing more than half of its capital.

You currently hold a 0.65% stake in Northvolt. Will you maintain your share?

“I can’t say.”

Can you comment on the size of your investment?

“I’ll put it this way: We’re helping the party – significantly.”

When you say 'significantly,' what do you mean?

“Significantly.”

The funding round is still open; do you think it will close?

“These are ongoing discussions, that’s all I can say. We’re also hoping the Swedish government steps in.”

The government has already said no; do you think they might reconsider?

“If Sweden wants to be a destination for industrial investments, then when challenges arise in such investments, the Swedish government should offer support. Otherwise, the future of industrial investments in Sweden becomes uncertain.”

Was it an obvious decision to invest in Northvolt now, when they need capital?

“Absolutely. We investors have to be there in both good and bad times, especially in the tough times when it’s raining.”

What do you think of Northvolt’s strategy? Do they need to make changes going forward?

“If things are challenging today, it’s probably because something should have changed. If everything were going smoothly, why would you need to change anything? But if things aren’t going well, adjustments have to be made.”

What’s your view on the shareholders who are hesitant to back Northvolt?

“Investors have to be there in both good and bad times, especially the bad.”

Goldman Sachs, Northvolt’s second-largest shareholder, is also considering backing the battery company, according to a Bloomberg report citing three sources familiar with the Swedish startup's situation. Nordic pension giant AMF and Sweden's state pension funds, AP-fonderna, are also reportedly open to injecting capital.

Investing in Swedish Energy Companies

Impact Loop recently interviewed Lowina Lundström, EIT InnoEnergy's head for Scandinavia, to learn more about the fund’s investment approach. She confirmed that the firm is continuing to invest in wave power company CorPower Ocean, which recently raised SEK 362 million (approx. $32 million USD). Its portfolio also includes companies like NitroCapt (green nitrogen fertilizer), battery company Altris, and nuclear fusion firm Novatron.