Big deal: QuantumScape fuels up on VW cash

If you are looking for proof that the university innovation ecosystem finds itself in an outstanding place at the moment, you may want to consider the fact that this month has already seen news about three initial public offerings.

Aptinyx, a US-based neurologic disorder drug developer that emerged out of Northwestern University spinout Naurex, raised $102m when it floated on Nasdaq last week.

Autolus, a UK-based cancer-focused biopharmaceutical spinout from University College London (UCL), went public by putting $150m in its coffers – a whopping $50m more than the company had originally targeted.

And Forty Seven, a US-based oncology therapy developer spun out from Stanford University, filed for a $115m initial public offering earlier this month that will ensure the current IPO bonanza is going to continue.

Forty Seven is unusual in that the company raised a $34.1m series A round only two years ago and closed a $75m series B just eight months ago – an incredibly fast turnaround from early-stage funding to exit, particularly for a healthcare company.

But IPOs are just part of the story and Forty Seven is merely one of the latest success stories for Stanford. Another one is QuantumScape, a US-based developer of solid-state battery technology for long-range electric vehicles.

QuantumScape raised $100m in funding on Thursday from carmaker Volkswagen (VW) and established a joint venture with the corporate to produce solid-state batteries at an industrial scale. One of the joint venture’s long-term goals is to create a production line by 2025.

The investment, once it closes following regulatory approval, will make VW the largest automotive shareholder in QuantumScape. VW purchased a 5% stake in 2014 for an undisclosed amount, following a collaboration agreement signed in 2012.

Founded in 2010, QuantumScape is working on solid-state battery technology. Such batteries are expected to be smaller and cheaper than current liquid lithium-ion batteries, while boasting higher capacity, faster charging and longer lifespans.

The technology could prove transformational for electric vehicles – the VW e-Golf model currently manages up to 300 kilometres on a single charge, but a solid-state battery would theoretically boost that distance to nearly 750 kilometres.

QuantumScape holds approximately 200 patents related to the technology. The spinout is being led by chief executive Jagdeep Singh, who has an MSc in computer science from Stanford University.

Singh said: “Volkswagen is the world’s largest automotive manufacturer and leads the industry in its commitment to electrification of its fleet. We are thrilled to be chosen by Volkswagen to power this transition.

“We think the higher range, faster charge times and inherent safety of QuantumScape’s solid-state technology will be a key enabler for the next generation of electrified powertrains.”

However, the technology, while promising, has remained out of reach so far. Advances have been difficult to attain – car producer Toyota admitted in October 2017 that battery life had been a particular challenge in its own efforts to develop the technology.

But VW and QuantumScape seem to be further ahead than others, as the corporate has already successfully tested early-stage sample cells developed by QuantumScape at automotive rates of power in an industry first.

Axel Heinrich, head of VW Group Research, will join QuantumScape’s board. He said: “The solid-state battery will mark a turning point for e-mobility. By increasing our stake in QuantumScape and forming the joint venture we strengthen and deepen our strategic cooperation with an innovative partner and secure access to the promising QuantumScape battery technology for Volkswagen.

“We want to accelerate the commercialisation of QuantumScape’s solid-state batteries. And we combine forces to leverage Volkswagen’s experience as a production specialist and QuantumScape technology leadership.

“Volkswagen is thus taking another step toward a sustainable zero-emission mobility for our customers in the future.”