As lithium iron phosphate batteries take over the electric vehicle and energy storage markets, a Singapore startup is betting that recycling them economically will become essential for securing lithium supplies.
NEU Battery Materials, which recycles lithium iron phosphate (LFP) batteries, has closed an oversubscribed funding round of $7.6 million, Evertiq reported on Monday, October 26. The round was co-led by Shift4Good, a global venture capital platform focused on decarbonising and building resilience in transport and energy, and SGInnovate, a deep technology investor backed by the Singapore government.
New investors Lotus Singapore Group and M7 Holdings also participated, along with existing investor Paragon Ventures I.
From factory to scale-up
The funding follows the commissioning of NEU's factory in Singapore, which has capacity to process 1,300 tonnes of material a year. The company will use the new capital to scale up production of battery-grade lithium from LFP feedstock, including scrap from cathode production and black mass from end-of-life batteries, and to expand internationally.
"The funding will catalyse the scale-up and deployment of our modular LFP recycling technology," said Bryan Oh, co-founder and chief executive of NEU. He said it would expand the company's output of battery-grade lithium at progressively lower costs for customers.
The technology
NEU has developed a patented technology it calls electrochemical redox targeting, which it describes as a modular approach to LFP recycling that makes lithium recovery scalable, cost-efficient and more sustainable.
Conventional battery recycling typically uses either high-temperature smelting, known as pyrometallurgy, or chemical leaching with strong acids, known as hydrometallurgy. Both methods can be energy-intensive and generate waste. Electrochemical approaches aim to selectively extract lithium using electricity, potentially with lower energy use and fewer chemicals.
Why LFP recycling matters
LFP batteries have become the dominant chemistry for many electric vehicles and for grid energy storage, because they are cheaper, safer and longer-lasting than nickel-based alternatives, and do not use cobalt or nickel. Chinese manufacturers such as CATL and BYD have driven their adoption, and automakers worldwide have embraced LFP for mass-market vehicles.
But LFP batteries present a challenge for recyclers. Unlike nickel- and cobalt-based batteries, which contain valuable metals that make recycling profitable, LFP batteries contain mainly lithium, iron and phosphate. Iron and phosphate are cheap, so the economics of recycling depend almost entirely on recovering lithium efficiently.
As millions of LFP batteries reach the end of their lives in the coming years, efficient recycling will be important both for the environment and for securing lithium supplies.
Investor views
"NEU has developed a differentiated solution to recover battery-grade lithium from LFP feedstock," said Sebastien Guillaud, co-founder and managing partner at Shift4Good. He said the company is entering an industrial scale-up phase that supports more resilient supply chains.
"NEU plays a strategic role in the battery value chain, and we remain committed to supporting its growth," said Hsien-Hui, head of investments at SGInnovate.
Lithium supply security
Lithium is a critical mineral for the energy transition, and supply is concentrated in a few countries. Australia, Chile and China dominate production, and China controls much of the world's lithium refining capacity. Governments in the United States, Europe and Asia have sought to diversify supply chains and reduce dependence on China.
