Holyvolt Raises $45 Million to Build Battery Chemistry China Doesn't Own

Stockholm-based Holyvolt has raised $45 million in equity to hunt for battery chemistries China doesn't control — at a valuation of $245 million, according to a person familiar with the company.

Fifth Wall, Zone II, CC.VC and several angel investors from the defense and finance industries backed the round. The company told Fortune the money will fund the search for cathode materials outside China's grip.

The gap is enormous. China makes about 85% of the world's cathode active material — the component that largely determines a battery's energy and cost — and roughly 80% of the world's battery cells. Its lead rests on the two dominant chemistries: NMC and lithium iron phosphate, or LFP.

"If we take LFP and we try to out-LFP China, we will lose," said Steven Prast, Holyvolt's chief operating officer and a former Tesla manufacturing leader. "We'll lose that every day."

Or, as he put it more bluntly: "We will not be able to out-China China on the battlefield that China has defined. They're the world champions at being China."

Why batteries don't follow Moore's Law

Prast, who is old enough to remember bag phones, argues lithium-ion technology is at best 20% through its maturity curve — maybe 10% by conservative estimates. The transistor didn't shrink the phone, he said in a Zoom interview with Fortune. "What took us from that to this is the battery."

Batteries haven't matched the chip industry's predictable gains for a simple reason, he said: "The problem for battery is that it's a chemistry problem and not a physics problem. If it were a physics problem, you'd have Moore's Law."

That puts Holyvolt on one side of a split in AI-driven science. Most of the field believes it can solve chemistry computationally. Holyvolt belongs to the smaller camp that says AI still needs a physical lab to check its work.

"We have to go to the lab and we have to go test," Prast said.

What did the $45 million actually buy?

The lab in question is Wildcat Discovery Technologies, a San Diego company Holyvolt merged with in March in a deal The Next Web reported at $73 million — a figure the firm confirmed as accurate. Founded by Scripps chemist Peter Schultz, Wildcat built a high-throughput system that tests thousands of battery materials in parallel.

The numbers behind it:

• More than 225 projects over 18 years
• More than 85 customers, including BMW
• More than 500,000 cells tested

Founder and CEO Mathias Ingvarsson built the company around that data pile. Ingvarsson previously drove Tempur-Pedic's international expansion through its NYSE IPO and ran its European business for six years after the listing. He said Holyvolt trained AI models on Wildcat's results and wired them back into the lab, so each round of real-world tests sharpens the next prediction.

Most AI-for-science startups start with models and then look for data. Ingvarsson told Fortune Holyvolt came at it from the other direction, with "the reinforcement learning we have done for 20 years, which AI needs to actually learn and build on."

He said the lab already runs 10 times faster than conventional R&D, based on a completed customer case study, and expects the AI loop to push that figure higher. "I'd go so far as to say that we have cracked the code on how to do it," he said.

What's the deadline?

The first product out of that loop is DRX, short for disordered rocksalt — a family of cathode materials using neither nickel nor cobalt. Prast described it as delivering "NMC-like" performance, "better than or equal to" nickel-based chemistry, at roughly the landed cost of LFP in North America. The supply chain, he said, had to be "entirely friendly." He declined to name suppliers. DRX has published performance data at scientific conferences, including the International Battery Conference in March 2026.

The timing matters. Starting Oct. 1, 2027, Section 154 of the fiscal 2024 defense authorization act bars the Pentagon from buying batteries from CATL, BYD and four other named Chinese manufacturers — even as the military pushes to expand its drone fleet. Holyvolt plans to commercialize DRX in 2027, starting with unmanned aerial vehicles before moving into mobility. It is also working on formulations for automakers and one aimed at data centers, which need bursts of very high power as GPUs spin up.

'I've seen this movie before'

For Prast, the fight is personal. "I grew up in northern Michigan. Long family history in the auto industry," he said. "I've seen this movie before. I know how it ends."

He framed the stakes as stability, not rivalry: "It's unstable when you have too much concentration in any one place." Ingvarsson took a similar line — "I have nothing against China" — while noting Volvo Cars, his home country's best-known carmaker, "happen to be Chinese nowadays." Geely owns a majority stake.

Holyvolt won't build gigafactories. Prast said the company is open to licensing, toll manufacturing or joint ventures, and will leave industrial scale to partners. His warning: "The transition from there to actual industrial scale is the killer."