Building the world's 'thinnest' battery out of Europe

0:00We are not aiming to go headlong with traditional lithium-ion batteries and we're really trying to develop a new category of batteries for new applications. There are many markets actually looking for a very thin, integratable battery into applications like labels, tracking labels. You can think of it similar like an Apple AirTag, but just a mass product for tracking all kinds of products in a simple label format. And here there is simply no battery which can be as thin and as integrated into that. I'm most excited about the whole medical devices category. where currently batteries and size is a huge constraint factor on a more concrete level.

0:33And on a high level, I'm excited about because in five or maybe 10 years, hardware products won't brag about battery life. They will just actually make the battery disappear and it will focus on functionality and what it can do. The whole industry is looking for a fully solid state battery and most of them actually still use a bit of liquid inside of their cells. So this was one of the first realizations where we said, okay, can we not make this into a product itself rather than only a model system? So Europe has been able to showcase its industrial ability historically. And still today, Europe is very capable of achieving its own independence, quote unquote, in this market.

1:08Andreas Munk Holm:Welcome back, everyone, to the European Easy Podcast. We spent decades improving batteries, more capacity, lower costs, slightly faster charging. But if you zoom out, most of those improvements have been nothing less than incremental. And that's starting to look like the wrong question to ask. Because the real constraint today is just how much energy you can store. It's where you can put it. It's how safe it is. And it is what it actually enables. In other words, batteries aren't just a component. They define what products can exist. And that's what today is all about. Joining me, Michael Blame, managing partner at Redstone, investing in deep tech industrial transformation across Europe for decades now.

1:45Andreas Munk Holm:We also have Mohamed Folser, partner at Redstone. I will be referring to him as Mo, focused on identifying exactly these kinds of inflection points in hardware and energy systems. And finally, Moritz Futter, founder of Battery, B-T-R-Y, for those that are Googling this, building ultra-thin solid-state batteries that could fundamentally reshape how devices are designed. Let's start with this shift.

2:12Andreas Munk Holm:This show is not investment advice, and the hosts of this episode may be invested in the funds and companies featured. Michael, we tend to think of batteries as a solved problem. Why is that wrong today? Well, Andres, first of all, thanks a lot for having us on EUVC podcast. Great being here. And it's absolutely not a solved problem. And we always tend to think from the customer perspective. And like nobody says, oh, I love waiting for two weeks instead of instant delivery for a package. Or I want my iPhone or my phone to be like the size of a suitcase. today's batteries force quietly exactly that on us.

2:51We pretend they're soft because our phones last a day. But if you zoom out, exactly size, safety, heat are strangling the next wave of innovation. And the battery is ultimately still the grumpy bouncer at the innovation club's entry and keeps the really cool stuff and the really cool ideas outside.

3:12Andreas Munk Holm:Why is that, Michael? what exactly what use case would you say that is like most present to everyone that we're unable to unlock because batteries function as that bouncer? Well, it's like the we call it the form factor tyranny. So battery still dictates entire devices. You want a coin sized sensor too bad because ultimately it needs to be three times thicker. There's thermal limits, batteries heat up fast, So devices throttle down or shut down completely. And then ultimately also safety restrictions, push for higher density, ultra fast charging, and safety systems slam the door. We're actually stuck in a 2018 performance in a 2030 world.

4:03Andreas Munk Holm:Mo, let me ask you from an investment perspective, where do you see it breaking? What is it that's keeping us from getting the battery innovation that we need? I think maybe to qualify, given that also batteries on the call here, it's not necessarily what the market has not done. Rather, it's what the market is not looking at. And in this particular case, with respect to the conversation today, it's that the market really doesn't understand the relevance of sub one ampere hour batteries. So really, when you look at it from that perspective, it's not a question of what's breaking, rather, how does a battery fit into the application?

4:50And given exactly what Michael was saying with respect to how the battery works currently with lithium ion, and he alluded that with sort of the stability in high temperature environments with certain devices. is if we come to the other aspect of sort of what you wear, I don't know who's wearing a wearable or has a smart card in their wallet or so, it's typically you have a form factor that's dictated by the battery. And again, Michael, it did elude this. So in terms of what's breaking, I would say that we need to have an understanding that batteries are very important to the final product and to enable that application and or product, a battery must be able to fit into that.

5:42Andreas Munk Holm:So from a battery perspective, and I think here I should look at you, Moritz, from battery, what is it that we're lacking from an innovation capability perspective? What are the breakthroughs that are missing for us to be able to let loose a new wave of innovation in form factor and in use cases? Yes, I think one thing which is often misunderstood that customers look for batteries which enable 10 times more runway. This is not the case. We have many discussions with the market and usually they exactly look what Mo and Michael already mentioned for more high temperature stability, form factor differences really fit in the energy they need in their applications.

6:27One specific use case I can also point out here as for example industrial sensors and there are many many factories which ideally would like to place sensors all around it that you know exactly at each time of the moment each time of the day how the factory is operating how the machines are operating how hot is the pipe how what is the frequency of the machine and to really tune the processes that then make the factory more efficient today this is simply not possible because of temperature stability And if we now would have a battery that can operate at this high temperature, we can all of them suddenly make the factory smart and then we also optimize the use case itself.

7:06Andreas Munk Holm:So this is, of course, sensors in harsh environments. It's ultra thin devices. It's that which is really what's limiting us. Then I think this is the perfect segue to ask you, Moritz, what are you building with battery? because then we can kind of unpack it from there and build out the whole battery industry with you as the core foundation of it. So what we are building at battery or why we do what we do at battery is we see that batteries are often limiting devices and often applications are built around the battery and we would rather have the battery be an integrated part of applications. So we really want to enable new applications with a battery.

7:49You see the constraints of today's batteries, what kind of effect it has on applications, and we would like that the battery is seen as an enabling component.

7:57Andreas Munk Holm:And what is the innovation here? Let me ask you, what's the technical breakthrough that you're making? Yes. So the technical breakthrough is we don't iterate on today's batteries. We really rethink how the battery is built. We're using very different manufacturing methods to build the battery. So this is a manufacturing method which is already scaled and established in other industries like flexible solar cells or computer chips. And we use this to build the battery. And this really allows us to build the battery very differently from ground up. Mo, can you explain to us why you got super excited about this?

8:36Yeah, I think sort of alluding to what Moritz said, it's really, you know, in the battery world, there's so much chemistry that has happened in the battery world. and I don't pretend to be a battery expert, but given what we've looked at and what we're engaged with, is that there was a time where chemistry was the innovation. And that still happens, but rather now the architecture and the manufacturing of these batteries, especially given it from a European context, is what's driving innovation. And this is why we love what battery is doing. So what they've been able to unlock is effectively how can you structure a battery today in a form factor that people can have a malleable play with, how effectively it's ultra thin and flexible.

9:31And with the most important part being that in a European context, what Moritz has been able to achieve is showcase that they can achieve scale with their manufacturing processes with a battery that is ultimately a European product.

9:47Andreas Munk Holm:Just double click on this. What you're saying is that that battery are building, that Moritz is building and producing for customers today is in fact so thin that it's like a foldable foil. I mean, I wish he had brought an example of it. And just to see this. He's showing it now. easy all right one great so it is that thin it's foldable it's flexible it is truly amazing and if you just think about the potential just what can a thin battery do i mean i probably am skipping to a question that you you might have but i think about it from like app apparel like in the sense of like what you wear imagine having clothes that are smart imagine having footwear that is smart Imagine having McDonald's that's understanding the consumer element of how they're integrating their purchases with how they're working with a supply of, I don't know, Coca-Cola for the case of argument in dispensaries.

10:53So you could use this for almost anything that has not been achieved at present. And it's such an opportunity for us in terms of excitement of an investment that, of course, also Battery is being led by wonderful people like Moritz. And I also have to mention his co-founder, Abby. So it was a very clear point for us to put some money behind them and hope to help them scale and achieve their ambitions.

11:24Andreas Munk Holm:Michael, maybe I can pull you in here because I think as was evident to many when we started the podcast here, you know the space super well. You know the industrial base in Europe super well. Can you talk a bit to the customers that you already know that have been waiting for this and why you fell in love with the market? So the interesting case here is there are a few obvious a customer for some small devices, et cetera. But it's really, I would say, a really big bet on creating a completely new category for devices and for products that in today's world don't exist. So you should think of it like a little bit like the Gorilla Glass when the iPhone came out that Steve Jobs found.

12:11And I think the magic of today's smartphones comes from this like hard, unbreakable glass. And that was what enabled the whole category ultimately. Without the Gorilla Glass, probably smartphones wouldn't be as successful as they are. And that's what battery is doing. They create like this, the thinnest battery in the world that's foldable, etc. So it opens up the kind of space for completely new things like storage. Founders now can purely design for functionality, elegant form, seamless experience. And you take battery and energy ultimately out of the equation. And that's really radical. And that's what we love.

12:56And I think people also underestimating how contrarian Redstone as a firm invests. like in this case, when everybody is looking for battery packs for EVs or large battery packs for grid storage, we went exactly the opposite way. We said, what could open up completely new categories in the tiny space, in the nearly invisible space? And that goes back to long history. 2021, when everyone was piling in consumer apps, we went all in in deep tech. When everybody was chasing flying drones, we backed underwater drones and an airship company, both now world market leaders in their fields. And that's exactly where we see battery coming in.

13:37Andreas Munk Holm:Can you talk about your strategy, Moritz? How are you going to market? How are you collaborating with the industry giants that we have in Europe as an example? I imagine that many of them are an important part to your journey. Yes, that's an important aspect in how we do this. As a battery, we can enable many different technologies, but it's really important to find the right one where early on we can solve a pain point which is there with customers and so this we found with the thinness that that there are many markets actually looking for a very thin integratable battery into applications like labels tracking labels you can think of it simple similar like an apple air tag but just in a mass product for tracking all kind of products in a simple label format and here there is simply no battery which can be as thin and as integrated into that.

14:30And this is really now a market which enables us to bring the first products into the market, work together with customers to design a much more efficient product, and then allow us to scale the technology to a right size. And from that point on, we hope to enable much more applications, especially embedded devices, but also medical devices and wearables ultimately.

14:52Andreas Munk Holm:Moritz, you came out of VTH Shurek. You were first backed by high-tech Gründer Funds, and Michael and the team at Redstone came in the next round. I'd love to ask you a bit about the technical breakthroughs that were made. Like, as an example, solid-state batteries is something that we've been hearing about for years, but they haven't really taken off. I'd love to understand from your perspective, what have you done that will allow you now to make these drastic changes in form factor for the batteries and what's the underlying technology there yes so we come out from from research so uh originally we we researched and developed solid-state batteries more as a model system so we had full working solid-state batteries they were very tiny very small they were operational but they really the idea was to understand uh batteries in general as a model system to look at interfaces but then we also realized okay but they actually work quite well and they are fully solid whereas the whole industry is looking for a fully solid state battery and most of them actually still use a bit of liquid inside of their cells and this so this was one of the first realization where we said okay can we not make this into a product itself rather than only a model system and then we looked more into into the manufacturing process which is also something in a better industry what's often seen as not economically scalable which is wrong because it's used in many different other industries already at a huge scale and almost fully automated so this really gave us the opportunity we saw how it works we also see there's a bit of a misconception in the market and we see the need in the market and all of this in a way came together.

16:39And then Abi Abdesalemaribia, who was a PhD student back then, and me as a scientist, we came together and said, okay, we need to scale this and to make this into a manufacturer product.

16:52Andreas Munk Holm:Michael and Mo, do you consider this a technological bet or a scalability bet on the industrialization of the existing technology, but it just needs to be done in a way that hasn't been done before? Where do you see the risk of this investment, so to say? If I had to jump in here, I would say the risk of the investment really is, I mean, on a brutal honesty sense, is can Moritz and Abby achieve the goals that they've told us about, right, from an investor perspective? And the reason we backed them is that they have showcased to us that they're able to do that. And since our investment, I can tell you, I'm very happy to see just the development.

17:38I mean, I'm smiling here because Moritz knows exactly what's going on. Like this product, this technology has really come into a market that has changed an environment where others just thought wasn't possible. So as you said, or as Moritz said, solid state batteries were always seen as sort of this later stage development. But the reality is actually it works now. It's happening now and scaling them while people have imagined or have rightly stated that it is hard. It is brutally hard. but we are in a position now where we are looking to bet that battery, in this case, can achieve what others have said was not possible.

18:28And they're doing that very effectively.

18:31Andreas Munk Holm:Michael, I'd love to ask you, you've invested in the industrial space for a long time. What have that taught you about scalability of production and what it requires from the founding team? What are the key lessons you've learned through your investment career doing this work? First of all, technical feasibility and production at scale are two completely different things in a way. So we're seeing many founders, or to be founders, many scientists that have great products that work in a lab or great technology that works in a lab. But then it's still a completely different thing to produce them at scale.

19:16So what we're doing is like really always with an investment, even if you think technology works, everything is great, always think the design, the production, the delivery process already while designing the product. And that's also something we really liked at Battery, that they had a very clear kind of idea or already first steps in how they're going to achieve mass production, why it makes sense, who's going to do it. And it's like as important as the technology itself. And the world is full with kind of great technology that has never achieved scale because of the production term. And there's this famous quote of production hell from a very successful entrepreneur that It shows you just like how hard it is to go at scale.

20:05But maybe also Moritz wants to elaborate a little bit more on that and how he tackles that and how he thinks about it, because it was also one of the things that we heard, like how can you invest in a battery and are you going to produce it? And does it make any sense?

20:20Andreas Munk Holm:Yeah, Moritz, I think you should go ahead on that. And I think, Michael, you teed it up. I'm sure you referred to Elon Musk just before that he is super well known for saying the hard thing is not the technology. The hard thing is being able to produce at scale and build a manufacturing line that actually functions at the level that's needed to become a world-dominant company. Definitely. I think also the scientific paper or the first lab results, it's really just a starting point. And it was exactly all of us. We worked in the lab and we had CEDEM working. And since we started the company, we spent most of our time on scaling this and making this into a scalable product.

21:00And our approach here was to always partner with manufacturing companies, with machine producing companies. We've done similar things before, not for batteries, but for other applications. And to go there and to learn from them and to scale this together. Without first buying an equipment, which we see many hardware startups do, they often immediately jump into purchasing equipment. And we ourselves often were tempted of buying equipment. And usually it comes up every other month that we think we now need it, but then we figure a way out. Actually, we can have a way around it. And we first test and rent until we are really there and we know, okay, this is the system, this works.

21:41And we have proven that it works, not only with ourselves, but also our customers. So our way is really iterating step-by-step going to larger machines. We've produced so far five different machines and the next one is already next month, which gives us a lot of know-how on how to industrialize these processes. And then on the same time, of course, partnering with people, which we don't want to develop everything. We want to develop the core of our technology, which is the battery. But there's a lot of know-how around it, especially in Europe. There's a lot of know-how on flexible electronics, which we can tab into and then partner and go much faster like that and building the first products.

22:21Andreas Munk Holm:Maybe for the audience that are deep tech founders that are crunching away at hard problems that do oftentimes require close partnerships with corporate partners. Can you talk a bit about your key learnings from setting up those partnerships and navigating it? There are a lot of founders that break their neck on corporates that signal one thing and end up doing something else. I think the most important step is going there and testing it and running it yourself. of being there on the side and trying to understand the systems. You can talk a lot about systems. You can plan a lot beforehand, but you really only understand it once you're there.

23:02You bring your materials, you bring your processes, and actually run the system and understand it. Only then you can really validate, is this a system which works for us or not?

23:10Andreas Munk Holm:Is that both in terms of the technical side, but also the partnership potential, the trust that you have with a partner, meaning that you've got to go there as the founders. you've got to spend real time and be really close to that other partner to be able to. Can you talk a bit about how you manage those relationships and what gives you trust and what has made you back out of some relationships? So indeed, we try to be there. We try to be there on site always. And we've seen that this is different how other companies sometimes approach it in a way that even people on site were surprised. We rent a system for two weeks.

23:47We do a campaign and then we told them, yeah, but we will be there the whole two weeks. And they were first a bit surprised because normally people don't do this. But this is very key. You build up a relationship. You build up a trust. We told the fact that much more people from there that also came to the side. And then you can actually talk and develop a partnership and try to understand what they can, what they're capable of, what they're maybe not capable of. And then will you find a way together here?

24:12Andreas Munk Holm:Michael and Mo, I want to ask you a question from the investor perspective. to. I've spoken to a bunch of deep tech investors about batteries over time, and quite a few of them have said, I'm never going to do batteries in Europe because we're just way behind China, especially. And for that reason, we just do not have the ecosystem. Even if I met a founder who's doing incredible stuff, I wouldn't dare make that bet. Can you talk about what convinced you that this is doable? I think it's a very interesting point, but ultimately, as European investors, we can't keep always imagining that China is going to be the solution to everything, right?

24:57We have to put our eggs in a basket that we believe in. And we believe that Europe can achieve what, in this case, China has achieved in some capacity in the beginning. And to do that, we need to back those companies. When we look at it from what exactly, when you see a battery, again, just making it clear, is that it's a shift into a new design primitive or paradigm, if I was to put it into words. So really going ultra thin, flexible, and embedded directly into products that enable fall factor. So the question isn't more about what battery do I choose? Rather, it's what product can I build with a battery that is adjustable to my design?