Why we reinvested in cylib

WHY WE REINVESTED IN CYLIB: THE EUROPEAN LEADER IN BATTERY RECYCLING 

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Electrification is coming. Battery electric vehicles (EVs) are the future, the recent slump in European EV sales notwithstanding. A shift from a European to a global perspective reveals an unmissable trend. In China, the world's largest and most influential car market, battery-based vehicles already make up the majority of sales. Europe is poised to follow suit, particularly with the impending ban on new petrol car sales by 2035. But one crucial question remains unanswered: can Europe develop its battery value chain fast enough to allow European EV manufacturers to compete effectively with their Chinese counterparts?"

‍Why Europe needs to deliver a closed-loop battery supply chain

Fully electrified mobility is key to delivering the regenerative world we envision at World Fund, but several challenges remain before we can achieve this goal.

Today, EV battery production requires mined materials such as lithium, cobalt, and nickel - critical materials linked to high carbon footprints and often unethical supply chains. The global supply chain for these materials is also highly vulnerable to geopolitical tensions, with China playing a dominant role in production and processing. In 2023, China even began restricting exports of graphite, essential for batteries, which has led to concerns about severe materials shortages in the near future. McKinsey has warned that the EV industry could face a staggering 55% shortfall in lithium supply by 2030, alongside significant deficits in nickel and manganese. 

Against this backdrop, Europe must secure access to battery materials. Recycling of used battery cells is the most obvious path, as this is where the materials can be found in the highest concentration of all.

However, currently retrieving all materials in an end-to-end recycling process is not cost-effective, and just 5% of lithium-ion batteries were recycled in 2022. And, despite significant funding being poured into the sector, largely in the USA, until now no company has deployed the necessary technology.

But the incentive to do so is enormous. The global battery value chain is projected to become a €360 billion opportunity by 2030. While In the EU, battery recycling alone is projected to be €3 billion market in 2030 and €7bn by 2035 in EU alone. 

Last year, the European Parliament responded and introduced new regulations enforcing the development of a closed-loop battery value chain in a bid to secure its sovereignty and seize this huge market opportunity. The regulations require minimum targets for recycling efficiency and material recovery beginning in 2025. These targets will be further tightened and recycled materials are mandatory in new cells till 2031. But these targets will be impossible to achieve with the current battery recycling technology. 

After meeting with the stellar cylib team and deep-diving into their tech, we knew we had to invest

cylib’s unparalleled team is addressing this urgent demand and clear market opportunity with a patented cutting-edge, water-based approach to battery recycling.

It delivers needed industry-leading efficiency and purity rates. Cylib’s process not only ensures regulatory compliance, but also enables a profitable business model through requiring lower chemical usage. The ability to lower chemical usage reduces costs, energy requirements and environmental impact.

And, crucially, according to our own CPP analysis, batteries made from materials recycled by cylib can save up to two-thirds of emissions compared to those made from virgin materials. In total, the technology has the potential to save 118.0 Mt CO2e per annum by 2040, meaning it is a key lever for limiting global CO2 emissions. In this way, cylib will help European car manufacturers close the loop in their supply chain, while also reducing their carbon footprints and achieving ESG targets. 

cylib’s process is based on nearly a decade of research at Germany's top technical university, RWTH Aachen, by CEO Lilian Schwich and CTO Paul Sabany. Lilian is widely recognised as one of the leading battery recycling researchers in Europe. She established the Battery Recycling Working Group (BRWG) at the Institute of Process Metallurgy and Metal Recycling and built it up to 16 PhD students. In addition, Paul - former head of the BRWG laboratory - and Lilian both have inside-out knowledge of the battery recycling industry, having worked extensively as consultants in the sector.  

We initially invested in cylib’s Seed Extension round in early 2023, which was intended to finance the company’s pre-industrial line. Within 11 months, the line has been successfully launched and cylib has proven the scalability of its process. This is unprecedented in the sector and incredibly impressive. The line now delivers several tons of recycled battery materials per week and has tested a range of battery cell compositions.

Together, Lilian, Paul, and COO Gideon Schwich have assembled an exceptional group of more than 70 technical experts and industry veterans, and we’ve seen the entire team work relentlessly and effectively to execute their vision.

‍Doubling-down on cylib: A milestone Series A and the launch of a landmark recycling facility 

For all the reasons outlined, we wanted to double down on cylib. Fortunately, we were able to co-lead their oversubscribed €55 million Series A round this spring - the largest battery recycling funding round in Europe to date. Our fellow investors included industry giants Porsche Ventures and Robert Bosch Venture Capital - another sign of cylib’s market-leading potential.

This funding has already been used to strengthen cylib’s team with senior hires, including plant engineers who have done everything from building nuclear power plants to overseeing multi-billion dollar assets for major European chemical giants. Now, it is helping the team to take their innovative recycling line to an industrial scale. 

Today [SEPTEMBER 9TH] the company unveiled its new 236,000 sq ft industrial plant in Dormagen, Germany. The industrial plant is scheduled to commence operations in 2026 and deliver a recycling capacity of 30,000 tons of end-of-life batteries per year - making it Europe’s first and largest end-to-end recycling facility.

Strategically located at Currenta’s Chempark Dormagen between Düsseldorf and Cologne, the plant will be embedded in the European chemical industry. The site offers ideal infrastructure and logistics, and also marks the beginning of the transformation of an historic industrial site into one contributing to a sustainable, regenerative economy.

We are extremely impressed with what the cylib team has achieved. This company has managed to take research from the laboratory and enter industrial-scale production within two years. They have proven that lightspeed industrialisation of climate tech research born in Europe is possible. This is the type of project we need more of in the years to come, and we are proud to be supporting the team on their journey. 
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To find out more, please contact: 

Dr. Mark Windenecht, Investor, World Fund 

mark@worldfund.vc