Creating the Full Circle of America’s Electric Energy System

Energy sovereignty is a key component of economic stability and national security. Achieving this in the United States means building up every part of the circular energy system — from materials production and manufacturing to recycling and energy storage — from the ground up. This is why we need a generational company leading the charge.

The best companies don’t limit themselves to a single product, strategy, or business model. Across a wide range of industries, the most enduring organizations tend to be those with multiple “acts”: First as trailblazers who create or redefine entire categories, then as continual innovators who evolve to capture new and larger markets, develop more valuable IP, and create wider moats.

For companies operating in physical sectors, the opportunity to deliver successively better economics and returns is even greater, thanks to footholds established as first movers and the sheer size of the markets they are targeting.

This is the playbook of Redwood Materials, which has developed the only vertically-integrated, closed-loop battery recycling, material refining, and energy storage platform in the United States. Initially focused on battery recycling and cathode active material (CAM) manufacturing — effectively creating one of the only domestic circular supply chains of critical minerals — Redwood’s recent expansion into energy storage has made it an integral part of the electricity ecosystem.

While everyone has taken note of the skyrocketing demand for energy — driven by the AI revolution and widespread electrification across nearly every industry — Redwood was quick to recognize its unique ability to do something about it. The company rapidly leveraged its infrastructure, expertise, and industry partnerships to become a critical solution powering the buildout of data centers and other energy infrastructure. Redwood’s latest act represents exactly the type of generational business we look for at Eclipse, and we are thrilled to be leading the company’s $350 million Series E.

Redwood’s immediate traction in the market is emblematic of today’s AI “arms race” and the geopolitical and economic tensions that have created an urgent need for domestically available electric energy. Along with expanding our domestic portfolio of energy resources (by building out alternatives such as nuclear and renewables) and improving infrastructure, the U.S. needs large scale energy storage in order to create a robust, reliable, and efficient domestic electric energy system. Redwood is poised to lead this mission, and will use this latest funding to expand energy storage deployments as well as its material refining and production capacity.

I’m thrilled to be joining the Redwood board. I’ve had the privilege of knowing Redwood Materials Founder and CEO JB Straubel since 2012. Few entrepreneurs have the experience that Straubel has had in complex sectors that redefine economies, and we’re excited to partner with him to bring our collective experience. He stood out as one of the sharpest minds at Tesla, solving problems from a first-principles perspective and making some of the key decisions that enabled the company to scale into the iconic organization it is today — and a prime example of how to create successful second and third-order businesses. Redwood was actually born out of Straubel’s firsthand experience at Tesla, as he saw the need for a closed-loop, integrated battery recycling and CAM provider in the U.S. This is the mindset that created Redwood in the first place, and the company’s powerful combination of an innovation and execution-oriented culture that has allowed it to successfully create subsequent businesses that address the core needs of our modern industrial age.

At Eclipse, we know that this level of reindustrialization requires industrial-scale innovation, and we leverage our years of experience as operators at scale to help our companies successfully navigate this critical challenge. To create this new era of domestic energy, we have to move fast, and we have to move with purpose. Redwood can get us there.

More on today’s news from Bloomberg.

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