The Powerhouse: Inside the Invention of a Battery to Save the World by Steve LeVine Page A
Authors: Steve LeVine
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cell phones, print and fax papers, and organize meetings. For four months, they worked to raise $3.2 million in order to license and validate the idea that Argonne’s NMC 2.0, the advanced cathode that resulted from jolting NMC with a little more than 4.5 volts of electricity, could double the capacity and halve the cost of automotive batteries. They would spend the money to form a team of ten or so scientists who would build such an ultrapowerful battery. That would allow them to raise more cash and aim to manufacture it.
At the time, it appeared that, in the automotive world, only Kumar and Sinkula were aware of Argonne’s NMC formulation. They alone seemed to conclude that, if you were thinking of profit-making applications, NMC 2.0 was the most promising battery material available. Kumar had identified its properties at the Silicon Valley start-up company where he and Sinkula previously worked. The start-up, NanoeXa, sought to develop batteries for power tools, and Kumar, its chief engineer, had stumbled on the NMC after a months-long hunt for an edge over incumbent companies. He had examined hundreds of patents and academic papers on lithium-ion. The NMC and its second-generation improvement were superior to anything else he found. In 2006, he surprised Thackeray with a call about the invention. Until then, Thackeray had detected no industry interest in it at all, but NanoeXa’s CEO proceeded to license it for $150,000.
Just a few months later, Kumar and Sinkula both left NanoeXa, explaining that they wanted to work “in another company.” 1 To reassure their surprised CEO, they said it would not be associated with the NMC market. Within a few weeks, though, Argonne received another call from Kumar—he and Sinkula had launched their own start-up company. It would center around the NMC and be marketed to carmakers. In the coming years, the move on their own would be the subject of a considerable dispute with Michael Pak, NanoeXa’s CEO. But for now, fortune was with them. As Jeff Chamberlain had found in his own start-up stage, energy was the rage in Silicon Valley. Venture capital firms were competing fiercely for the most promising ideas. They had decided that renewable energy was the next big boom. But their eagerness seemed different from the past manias. It wasn’t just about money. The fever aligned with the Valley’s strain of politics, which generally vilified oil, embraced its technological rivals, and fretted about climate change. Here was a way for the venture capitalists to do well and do good.
Nationally and globally, a similar sentiment took hold about global warming. Barack Obama, at the time an American senator initiating a campaign for president, vowed to promote non–fossil fuel technology and reduce emissions of heat-trapping gases. But it was generally believed that whoever was elected, Democrat or Republican, would push through laws and federal spending to buoy solar, wind, biofuel—and battery companies. Silicon Valley’s venture capital community was prepared for these new policies and the commerce that would follow.
So Kumar sensed an almost physical reaction when, sitting before VCs, he launched his PowerPoint slide deck and said that the NMC, although more advanced than anything on the market, had thus far gone unnoticed. In Boston, a Harvard Business School graduate at a firm called RockPort Capital Partners “got very excited,” Kumar said. He asked to see Thackeray or Amine for himself. If what Kumar and Sinkula said was true, they would have their $3.2 million.
A couple of weeks later, Kumar, Sinkula, and two RockPort men flew to Chicago. Hearing out Amine, the investors returned to Boston and e-mailed a “term sheet,” an official commitment to fund them in exchange for half of their as-yet-unnamed company, to Kumar and Sinkula.
This was fast for Kumar. Despite his experience in start-ups, he now realized that he did not actually understand how funding worked. Back home
At the time, it appeared that, in the automotive world, only Kumar and Sinkula were aware of Argonne’s NMC formulation. They alone seemed to conclude that, if you were thinking of profit-making applications, NMC 2.0 was the most promising battery material available. Kumar had identified its properties at the Silicon Valley start-up company where he and Sinkula previously worked. The start-up, NanoeXa, sought to develop batteries for power tools, and Kumar, its chief engineer, had stumbled on the NMC after a months-long hunt for an edge over incumbent companies. He had examined hundreds of patents and academic papers on lithium-ion. The NMC and its second-generation improvement were superior to anything else he found. In 2006, he surprised Thackeray with a call about the invention. Until then, Thackeray had detected no industry interest in it at all, but NanoeXa’s CEO proceeded to license it for $150,000.
Just a few months later, Kumar and Sinkula both left NanoeXa, explaining that they wanted to work “in another company.” 1 To reassure their surprised CEO, they said it would not be associated with the NMC market. Within a few weeks, though, Argonne received another call from Kumar—he and Sinkula had launched their own start-up company. It would center around the NMC and be marketed to carmakers. In the coming years, the move on their own would be the subject of a considerable dispute with Michael Pak, NanoeXa’s CEO. But for now, fortune was with them. As Jeff Chamberlain had found in his own start-up stage, energy was the rage in Silicon Valley. Venture capital firms were competing fiercely for the most promising ideas. They had decided that renewable energy was the next big boom. But their eagerness seemed different from the past manias. It wasn’t just about money. The fever aligned with the Valley’s strain of politics, which generally vilified oil, embraced its technological rivals, and fretted about climate change. Here was a way for the venture capitalists to do well and do good.
Nationally and globally, a similar sentiment took hold about global warming. Barack Obama, at the time an American senator initiating a campaign for president, vowed to promote non–fossil fuel technology and reduce emissions of heat-trapping gases. But it was generally believed that whoever was elected, Democrat or Republican, would push through laws and federal spending to buoy solar, wind, biofuel—and battery companies. Silicon Valley’s venture capital community was prepared for these new policies and the commerce that would follow.
So Kumar sensed an almost physical reaction when, sitting before VCs, he launched his PowerPoint slide deck and said that the NMC, although more advanced than anything on the market, had thus far gone unnoticed. In Boston, a Harvard Business School graduate at a firm called RockPort Capital Partners “got very excited,” Kumar said. He asked to see Thackeray or Amine for himself. If what Kumar and Sinkula said was true, they would have their $3.2 million.
A couple of weeks later, Kumar, Sinkula, and two RockPort men flew to Chicago. Hearing out Amine, the investors returned to Boston and e-mailed a “term sheet,” an official commitment to fund them in exchange for half of their as-yet-unnamed company, to Kumar and Sinkula.
This was fast for Kumar. Despite his experience in start-ups, he now realized that he did not actually understand how funding worked. Back home
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