A start-up that goes out of business often happens. But it's rare for a young company to leave a slate worth more than 10 billion euros. The collapse of the Swedish Northvolt, the leader in European batteries for electric cars, which placed itself under American bankruptcy protection on Thursday, November 21, has cast a chill in economic circles: many fear that after such a fiasco, investors are more reluctant to finance projects linked to the energy transition in Europe.
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“Northvolt is above all the crash of an overly ambitious operator, who wanted to control everything in the battery chain. Investors will be able to tell the difference compared to more realistic and better controlled projects”tempers Thierry Déau, founder and CEO of the Meridiam infrastructure fund, one of the main supporters of the Verkor gigafactory, in Dunkirk (North), which had raised 2 billion euros in September 2023: “But it dampens the mood”recognizes the financier.
Of the $14 billion (€13.3 billion) in equity, loans and grants raised by Northvolt since its founding in 2016, the bulk comes from private capital. A large part comes from Swedish and German industrial partners. The largest shareholder of the Swedish start-up with 21% of the capital, the car manufacturer Volkswagen had valued this stake at around 700 million euros at the end of 2023: it is now worth almost nothing.
Disillusionment
Because if the fallen king of electric batteries hopes to rise from the ashes after a financial restructuring, its current shareholders risk losing everything. For pension or private equity funds around the world which had supported the massive capital raisings of the extraordinary project, the disillusionment is all the greater since, a year earlier, an IPO was envisaged, with seen a valuation of $20 billion.
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First hit, Goldman Sachs had bet big since 2019 in Northvolt, through several envelopes of investment capital – in other words by using the money of its clients – to the point of becoming the second shareholder: Saturday, the Financial Times revealed that the American bank had announced to investors in these funds its intention to write down its securities almost entirely, i.e. almost $900 million erased. Seven months ago, the Wall Street firm assured them that this investment was worth more than four times the stake…
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