Second Vitality raises $40M to fulfill ‘infinite demand for energy’ with EV batteries

Second Vitality CEO Edward Chiang believes demand for energy in North America is infinite — and that his startup has the answer.

The corporate, which has headquarters in Canada and the USA, takes a novel method to repurposing electrical automobile batteries, Chiang instructed TechCrunch. The corporate’s method is particular, he stated, due to its twin deal with security and modularity.

Buyers apparently agree. On Tuesday, Second Vitality introduced it has raised a $40 million Sequence B funding spherical, bringing its complete funding to greater than $100 million. The spherical was led by Canadian VC firm Evok Innovationswith extra funding from grocery retailer fund W23, becoming a member of current traders like Amazon’s Local weather Pledge Fund and In-Q-Tel, the CIA-funded VC agency.

In Chiang’s view, the electrical grid in North America is in a shedding race to maintain up with this demand for energy, pushed by an more and more excessive local weather, the rise of electrical automobiles, and the info middle increase. To this point, he says principally Chinese language firms have stuffed this demand — to the tune of about 72% of the worldwide market, according to BNEF — including a nationwide safety wrinkle to the image.

Second Vitality is tackling this by taking battery packs from electrical automobiles, ripping out the automakers’ battery administration techniques, and writing its personal software program to handle the packs. It then packages the battery modules into bigger grid-scale storage options that may host a large mixture of battery chemistries, permitting clients to profit from future advances within the expertise whereas additionally decreasing downtime if a selected module fails.

Crucially, Chiang stated, Second Vitality is doing this all with UL Certification, making it the primary firm to repurpose batteries with a stamp of approval from the security group.

Chiang stated different firms engaged on repurposing EV batteries for long-term storage typically declare that they take a look at their merchandise towards UL certification requirements, however that they don’t truly receive the certifications, which requires using sure elements.

“What most different second life (battery) firms at the moment are making an attempt to say is, let’s simply foyer to make second life UL certification simpler, as a result of it’s not possible to get UL certification, because it stands,” he stated. “However at Second, we are saying that’s not true. We received it.”

UL certification might sound boring, however Chiang stated it could possibly make a distinction not solely with regards to security, but additionally in how these vitality storage merchandise are insured.

He claimed (with out naming them) that different vitality storage firms will depart an automaker’s battery administration system in tact on the re-used batteries, and basically trick the pack into pondering it’s nonetheless on the highway to coax the correct quantity of discharge.

This might make these storage options both uninsurable or too expensive to insure, Chiang stated. He pointed to Liberty Mutual’s enterprise arm participation in Second Vitality’s Sequence B as proof that his firm’s answer is above board.

“Perhaps as engineers, or as customers, we predict that’s type of attention-grabbing,” he stated. “In actuality, hearth inspectors don’t suppose that’s attention-grabbing. Automakers don’t suppose that’s attention-grabbing. You may think about if — I actually hope this by no means occurs — but when a battery catches hearth, the fireplace inspector will say, ‘Oh, hey, there’s a Tesla battery administration system in right here, or there’s a Nissan battery administration system in right here,’ and the automaker will say: ‘I’ve by no means given permission for anyone to hack and bootleg my security techniques.’”

Chiang’s confidence appears to come back from various locations. Regardless of being small — Chiang stated Second Vitality has round 72 workers — the corporate has signed provide offers with Mercedes-Benz and Nissan. It secured a $20 million mortgage from the Division of Vitality. And it’s constructing a gigawatt-scale manufacturing unit in Austin, Texas.

Second additionally has a rising e book of numerous clients, from utilities, to industrial firms, and — sure — information facilities.

However Chiang stated he additionally thinks plenty of Second Vitality’s method comes from the truth that it’s a Canadian firm at coronary heart, faraway from among the most base impulses of Silicon Valley.

Whereas Chiang stated “all the info middle firms have been reaching out to us,” he additionally burdened that his firm didn’t need to stroll right into a entice by fundraising towards guarantees that may’t be met.

“What we’ve been actually fascinated with as a complete is simply staying centered total in what we all know, and what we’re constructing, and serving actual clients, versus making an attempt to enroll offers which are 5 years or 10 years down the highway simply to fundraise. And sadly, we see that plenty of Bay Space startups are much less so making an attempt to ship product, however they’re making an attempt to boost the subsequent spherical,” he stated.

“However for us, I feel as a result of we had roots up in Canada, plenty of Canadian firms deal with constructing a tangible enterprise and an actual, worthwhile enterprise, in addition to a high-growth enterprise, and we’re fairly reasonable with regards to deployment.”