Quick-charging battery startup StoreDot gets $60M on $500M valuation led by Daimler

As we continue to see a proliferation of wireless connected devices make their way into the mainstream consumer electronics market, there has been growing attention on a key issue that will be central to making all these devices work: efficient power supplies, and specifically practical battery systems. Today, one of the startups that’s hoping to lead the conversation on how this will develop has raised a significant round of funding as it inches closer to a commercial launch.

StoreDot, a startup out of Israel that is developing a new kind of quick-charging (five minutes or less) battery to replace the lithium-ion components largely in use today in phones, electric cars and other un-wired devices, has raised $60 million in funding led by carmaker Daimler with participation also from Samsung Ventures and Norma Investments, an investment firm linked to the Russian tycoon Roman Abramovich. Daimler and Samsung have been prolific investors in autonomous car and other transportation-related startups (Samsung just earlier today signalled a new fund for this purpose; Daimler announced a round in Via just last week.)

StoreDot is not disclosing its valuation, but we understand from reliable sources close to the deal that the valuation is $500 million.

Daimler’s trucking division led the investment, and Doron Myersdorf, the CEO and co-founder of StoreDot, tells us that it will be the first ones to roll out its batteries in vehicles, expected to happen around 2020, with phone batteries coming sooner — in other words, the company has yet to launch any products. “The technology we’re developing for car batteries is similar to what we’re making for mobile,” he said in an interview. “Our focus is to get the mobile batteries to market next year.”

He also said that while Daimler’s trucks might be first in line, the plan is to integrate StoreDot’s batteries across other vehicles from the carmaker and its competitors. “We are working on the whole fleet, including luxury cars, passenger cars and buses,” Myersdorf said.

Half a billion dollars in value is a big leap forward for a startup that has raised $108 million to date. But there is a reason why companies like StoreDot are attracting a lot of attention these days.

The boom in wireless computing devices has well and truly descended upon us. From smartphones, tablets and laptops through to cordless speakers and watches, and now electric connected cars, there are more wireless devices in the world than there are people. We are fast approaching a time when it will be not just a choice but an expectation that we can use and interact with things whenever and wherever we want, not just when we’re tethered to a connection in the wall.

That brings various challenges to the tech world around computing power and network connectivity, but also how these devices will be powered, which is the challenge that StoreDot is addressing.

To do so, Myersdorf’s team is rethinking the whole concept behind the battery — an effort that has already generated 50 patents for the startup with more on the way, he said.

“We are designing a new generation of batteries,” he said, essentially rebuilding across all four components that currently make up lithium-ion batteries: the anode, the cathode, the charge transfer and the separator put in place to prevent shorts. “In order for fast charging to work, all these have to be totally redesigned because the tradition structure was focused on fast discharge, but there was no symmetry,” he said, referring to getting a charge to the battery in the first place.

In fact, we’ve seen some very high-profile examples of just how dangerous it can be to try to quickly charge batteries that exist today: The Note 7 fiasco at Samsung (which tellingly is an investor in StoreDot) highlighted how graphite, one of the key materials in lithium-ion batteries, overheats when charged too fast. 

StoreDot’s solution, in a less-technical nutshell, brings together a new combination of nanomaterials, both organic and inorganic, to both take in the charge and hold it, without heating up in the process and shorting the battery or worse.

The company started out in its labs with a charging solution that could fill up a battery in 30 seconds (read our report on that here), but as Myersdorf describes it, it was not a practical option:

“We could charge the full battery for a phone or car in a minute or less,” he said. “The tech allows for it, but it’s a question of practicality because one minute requires a very large charger, for a phone it would need a 750-watt charger.” This, he said, would look like a brick, and “it doesn’t make commercial sense to carry a small phone and big brick next to it to charge it.”

It would be even worse for a car, which would need a one-megawatt station to charge a car to run for 300 miles. In the end, it came up with chargers that were much smaller and took five minutes to charge either a phone or car, or whatever.

Next to come for the company — and it’s not a small thing — is the fact that it has yet to get any regulatory approvals for its batteries.

“This is a major challenge because we are breaking the rules of what is known in charging,” he admitted. “This is why we are engaged with the process of trying to open and accelerate the adoption of new standards for charging, which includes the connector, the charging station, and what runs in the car [or other device].” He noted that this is another reason why the investment from Daimler and Samsung is so critical: “For a startup to push those regulatory bodies is a challenge, but if you have a large player you have better chances to get this done in a reasonable timeframe.”

Still, Myersdorf remains realistic about what StoreDot has already solved, and what lies ahead. He recognises that there have been various failures in the battery and energy storage markets, and is focused on making sure that StoreDot is not going to be the next in line.

“Now, for StoreDot it’s more of an execution risk rather than an R&D risk,” he said.