German startup tozero has raised €11 million in seed funding to advance its innovative lithium-ion battery recycling technology. The round was led by NordicNinja, with participation from existing investors Atlantic Labs, Verve Ventures, and Possible Ventures, alongside new strategic investors In-Q-Tel (IQT), Honda, and JGC Group.
The new funding, which brings tozero’s total raised capital to €17 million (including a €2.5 million European Innovation Council grant), will support the construction of the company’s first industrial deployment plant, often referred to as a First-Of-A-Kind (FOAK) plant, team expansion to support growth, and scaling operations to process 30,000 tonnes of battery waste annually by 2026.
Addressing Europe’s lithium challenge
tozero addresses one of the key challenges in the battery industry. According to a recent Bain report, global lithium demand is projected to reach 3.1 million metric tons by 2030 — quadruple current levels — driven by surging EV production and renewable energy storage needs. Yet mining operations produce only 180,000 metric tons annually, creating a significant supply gap. Europe faces pressure, with 97% of its lithium sourced from China.
Adding urgency to the situation, the EU’s Battery Directive will require 80% lithium recovery from batteries by 2031. This regulatory push and supply chain vulnerabilities have created a pressing need for innovative recycling solutions, emphasising the need for immediate action in the industry.
With this latest funding round, tozero is positioning itself as a formidable competitor to Redwood Materials, the Nevada-based battery recycler that has emerged as an industry leader. Redwood Materials, founded by former Tesla executive JB Straubel, has already established itself as a dominant player in the US market, securing partnerships with major automakers like Ford, Volvo, and Volkswagen.
However, tozero’s technological advantage and European focus present a unique opportunity to rival Redwood’s influence. The company’s proprietary process, which achieves high-purity lithium recovery while dramatically cutting emissions compared to conventional mining, could make it an attractive partner for European automakers and battery producers looking to localise their supply chains, including BMW, MAN, and Webasto.
Behind tozero and its technology
Founded in July 2022 by CEO Sarah Fleischer, a mechanical engineer and serial entrepreneur, and CTO Dr Ksenija Milicevic Neumann, a leading metallurgy expert, tozero has developed an approach to address this rising problem. Here’s how.
Traditional high-temperature smelting methods often lose lithium and graphite while generating significant emissions. In contrast, tozero’s proprietary process achieves high-purity lithium recovery while reducing emissions by approximately 70% compared to conventional mining. The company’s feedstock-agnostic approach accommodates various battery types, operating with lower costs and greater flexibility through an asset-light model.
The company’s innovation has already yielded results. In April, nine months after opening its Munich pilot facility, tozero delivered its first batch of recycled high-purity lithium to commercial customers. The company has also demonstrated compliance with future EU recovery targets, achieving the mandated 80% lithium recovery rate in a pilot project with Circular Republic.
In fact, tozero’s technology positions the company to capture a significant share of the lithium-ion battery recycling market, projected to reach $101 billion annually by 2043. Beyond automotive applications, the company is expanding into ceramics, lubricants, construction, and high-performance glass manufacturing.
The future is green, isn’t it?
As the global demand for lithium continues to soar and environmental concerns mount, tozero’s innovative approach to battery recycling represents a crucial step toward a more sustainable and secure future for Europe’s energy transition.
Shin Nikkuni, Co-Founder and Managing Partner at NordicNinja, said: “tozero’s innovative approach to battery recycling is exactly what Europe needs to secure key supplies in the global electrification race, and Japan would love to collaborate. Sarah and Ksenija, two exceptional founders, have the expertise and drive to transform the landscape for sustainable battery solutions. We’re excited to support the tozero team in scaling its technology and commercial operation and contributing to a more sustainable and independent energy future for all.”
The company’s rapid progress from concept to commercial delivery, a testament to its efficiency and dedication, shows that a more sustainable and independent energy future is not just possible but is already taking shape.
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