E709 | Dr Lilian Schwich, cylib on Europe’s Battery Recycling Gap

0:00Andreas Munk Holm:Welcome back, everyone, to the European VC podcast. Before we dive in and say welcome to today's guest, I just want to set the context for this conversation and, of course, for climate tech in Europe more broadly. Because even with the scale and urgency of the climate transition, capital allocation remains deeply uneven. In 2024, teams founded entirely by women received just over 1 % of total climate tech venture funding and mixed-gender teams raised around 7%, obviously far too little. That's the backdrop of today's conversation is why we wanted to gather with the table, bring on women who are building serious climate companies and who, of course, bring the capital structures to them.

0:38Andreas Munk Holm:Carmel, you're one of those doing that. Can you just talk a little bit about the table?

0:43Carmel Rafaeli:Yes, of course. Andres, it's great to be here. So I'm Carmel and I head the table, which is a community for co-investing in women led climate ventures. We're non-commercial and we bring together syndicates, funds, family offices and CVCs to share deals pre-C to A, where there's at least one female founder holding substantial equity. We qualify it as an equitable state compared to a male counterpart if there is one. Doing anything that has a direct and substantial positive climate outcome. So sector agnostic, but climate positive. And the reason we do that is to increase the speed and the size of capital going into women building in climate and creating a much easier access to this pipeline.

1:30Carmel Rafaeli:In parallel, we're building the Table Foundation that will work alongside the community and will provide recoverable grants to match the tickets that the investors are doing in the deals shared, providing catalytic capital to accelerate the growth of underfunded innovation while closing the funding gap for women. And thank you for having me.

1:51Andreas Munk Holm:Of course. And just to put it abundantly clearly to everyone, it's a 300 million euro or pound foundation that Carmel is raising, which of course means that this is serious money for the ecosystem. So Carmel, thank you for doing that important work. So now let's look at our guest, Lillian Switch. She is the CEO and co-founder of Cylib, a battery recycling company based in Aachen, Germany. Cylib is building an end-to-end industrial process to recover critical raw materials from lithium-ion batteries. They closed the 55 million Euro Series A round, clearly one of Europe's largest A rounds ever. Of course, especially when you think that it's outside of AI.

2:29Andreas Munk Holm:And it doesn't end there. In December 2025, Cylip secured a 63.4 million Euro public grant from the German Federal Ministry of Economic Affairs and Energy to expand its industrial recycling facility. In other words, the company sits in a beautiful sweet spot between industrial chemistry, energy security and Europe's ambition for strategic autonomy.

2:54Andreas Munk Holm:Lillian, welcome to the podcast.

2:56Dr Lilian Schwich:Hi, everyone. Thank you so much. I'm super happy to be here.

3:01Andreas Munk Holm:So Lillian, I just waffled my way through a bit of a description of what you're doing. Could you make it maybe a little clearer to everyone exactly what you're doing?

3:12Dr Lilian Schwich:Yeah, I would love to. So you precisely said we are doing battery recycling with a focus on lithium-ion batteries. and the beauty of our process is as recyclers we really take everything which arises as scrap can be end-of-life battery packs from an ev car from a truck etc but can be also production scraps coming from giga factories we take those materials and process them with our unique process we will talk a bit more later. And then what is coming out of our process are super pure, valuable, raw materials which are critical for us as Europe and which can be then reintegrated into high-tech applications.

4:02Dr Lilian Schwich:And therefore, we actually, let's say, bring resources to another life.

4:09Andreas Munk Holm:Could you just expand a little bit on where the industry is because this is obviously a newer industry that is coming around as we have more and more batteries coming up for second lives and third lives and re-scrapping or improvement after having served their life as a as a battery in our cars as an example where are we do we already have demand for this type of solution where are we yeah so i would say generally speaking um

4:37Dr Lilian Schwich:the battery industry is still quite immature. We have, of course, looking to Asia, there is already a very, very mature value chain when it comes to the whole, let's say, procedure and the whole steps for batteries. But in Europe, every step from raw material mobilization to cell production over to system assembly and even the EV market penetration are quite immature. And this also is valid for the, let's say, aftermarket, where batteries are scrapped. And when looking into this recycling industry, like zooming in here a bit, we see that there are companies who are doing actually some sort of refurbishment of the batteries.

5:29Dr Lilian Schwich:and then there that there are some companies who are doing let's say pre-processing of scraps this means first mechanical treatments so that the resources are maybe in smaller grain size or whatever so the first steps are already covered in in europe but we have a very very large gap for refining metallurgy meaning we want to have separate raw materials we want to have lithium separated from cobalt and this just not exist in Europe and therefore here the market immaturity is super critical because without this very step our gigafactories don't have material to produce their battery cells and therefore for us it's so important to close the loop in Europe and we are actually, let's say, a missing link here.

6:25Andreas Munk Holm:Could you, Carmel, sorry for stealing the thunder here. I'm just asking some questions to try and really understand where are we, because one of the things I have heard about batteries in Europe, and that is the following statement, that the Chinese ecosystem is so much stronger and far further ahead that batteries as an investor, it might be from a sovereign perspective interesting and important, but as a VC, I'm not touching it. Obviously, that's not true. You've just raised 55 million in a Series A from some of the most revered investors, Porsche Ventures, World Fund, Speed Invest. The line goes on.

7:03Andreas Munk Holm:You have a grade A investors. So obviously, there are people that don't subscribe to that view. Could you talk a bit about where that's wrong, where it's potentially true, how you navigate it, how you talk about it?

7:13Dr Lilian Schwich:The industry is still evolving. As you correctly said China is a bit of a hat but that doesn't mean that Europe cannot like keep up and the question is actually we've seen that there are companies struggling of course but there are also companies who are really successful I don't want to you know go into name-dropping here and but the thing is many companies are really interested in diving deep into this battery value and why? Because we in Europe rely a bit on our industry to generate wealth and we are in a massive transformation here. The whole industry is transforming in electrification and this is not only we are always talking about batteries in mobility, yes that's very true, but batteries are also a crucial application for, let's say, energy storage for data centers, which even then fuel AI.

8:22Dr Lilian Schwich:And therefore, actually in our whole, everywhere where you need somewhat energy, there is no walk around when it comes to lithium-ion batteries. Therefore, I would say we had problems in the last years to form attractive products, especially in the mobility sector, right? So a lot of car makers have really improved, like actually the strength of the lithium-ion batteries, the attractiveness of the models put on the market. Here we've seen that Europe kind of was a bit, let's say, yeah, late to the party. But we see in the numbers of 2025 that Europe is really putting all forces into competing in this race.

9:11Dr Lilian Schwich:Because the truth is, if we don't succeed in bringing the particular steps of electromobility, of electrification, of lithium-ion batteries in the European market, our industry is screwed. And this not only reflects to the battery space itself, but also, as I mentioned, to AI, to the military sector and so on. So basically, I would say we kind of missed the first station in Europe, but we are still on a fast train.

9:44Carmel Rafaeli:And I think it's a really interesting analysis because your C-LUB is growing extremely fast. Your first race was in 2022, if I'm not mistaken. You're already building your factories and going forward. You decided to go for an end-to-end solution where a lot of people are doing very specific things. What drove such a big vision in being able to raise a substantial round and get support from government with such substantial funds? What drove your vision to think that it can be done differently? What do you think others are misunderstanding or under-evaluating?

10:26Dr Lilian Schwich:For us, it was clear in the beginning. If we are really bringing the technologies we had developed to the market by ourselves, we have to and we will do it fast. Why? Because actually the industry is changing at a very high pace currently and partnerships are formed now. Besides, there are also American companies who are already scaling their technology. I would say, of course, ever since 2022, a lot changed also with competitors from other continents. But we've seen that we have to reach a certain size within our company very, very fast to play a part in this battery game. The corporates who are really going into the battery space need partners now, need partners they can rely on.

11:27Dr Lilian Schwich:And a reliable partner is a partner who is also industrializing and being able to take all the materials in. And maybe taking all the materials in is a good bridge because we were doing technical consulting in 2020, and we have seen that the market is really big, that the scrap arising from both production scrap and also end of life is just immense. and we have had no companies inside who were able to take this material and make something useful of that. So we've seen actually a pain point in the market to really be convinced to go in the market. And we have seen that the pace is really needed to play with the large players along with the large corporates we want to work with.

12:26Dr Lilian Schwich:And then, of course, last but not least, what drove us was our conviction in the special technology we had developed. Because we've studied all types of companies being active in that space. And we haven't seen someone who really takes all the raw materials into account, how you should do it if you really mean battery recycling and resource efficiency quite serious. And so this was what was, I would say, our backbone, our strong belief in the technology and the changes of our technology.

13:04Carmel Rafaeli:So maybe geopolitics actually works a bit in your favor. In this case, the need for a resilient supply chain, a local supply chain, where a lot of us in climate are feeling geopolitics pressure us. In your case, maybe it's working in your favor.

13:19Dr Lilian Schwich:It is. Actually, it is. So that's a plus. I mean, the industry is already, you know, moving forward. But to have the, you know, tailwind from the political sector, because what we are doing is, you know, super critical for our industry. And therefore also for our independence as Europe in a very challenging global environment is a huge plus. and this is also connected to the battery regulation where everyone says like, oh, we have to get rid of regulation. We are doing too much regulation in Europe. I would say this doesn't really count for the raw material sector because frankly speaking, in Europe, we are in an unfair competitive landscape where other countries are building our tax rules, etc.

14:16Dr Lilian Schwich:in their favor. But in Europe, we have to find answers to that to save basically our raw materials and our energy supply. And therefore, it's great to see the signs of the European Union and also from Germany that here is a clear will to also invest in sovereignty and resilience.

14:43Andreas Munk Holm:This is a perfect example of how climate has transitioned into a sovereignty thesis instead. And those are really a lot of the investments that we're seeing having strong traction are, of course, in that exact resilient sovereignty space when it comes to climate. I'd love to ask you something else, and that's about your funding round because one of the really difficult things for most companies when you're building in hardware is, of course, that you have to stitch together a funding round that has equity on the one side, but it doesn't make sense to fund everything out of equity. And that's, of course, also why you raise a$55 million in the USA and at the same time have almost the same in public funding.

15:27Andreas Munk Holm:Can you talk a bit about how you did that, how you navigated it, how you balance the different instruments against each other.

15:35Dr Lilian Schwich:Yeah, absolutely. You're fully right. Just, you know, going with a hardware vision, an hardware company, to full industrial scale, just with equity, doesn't make any sense at all. That's just not sustainable in terms of the company growth. And therefore, for us, it was quite early clear that we need to have the conviction and the buy-in of different stakeholders. So basically, we rely on three pillars, I would say. Of course, still equity, super important. Then, as you already addressed, public grants of different levels. I will talk about that a bit more in a minute. And then the third pillar, looking to banks.

16:25Dr Lilian Schwich:we will need somewhat depth. And this is actually the only way to bring young scaling company in a hardware space to operations. And so with this early understanding, we really invested a lot of time and efforts from the whole CILIB team in navigating through the public grants landscape in Europe. Basically, we've seen the IRA from the US. We've seen that a lot of companies were invested and supported by governmental incentives. But for Europe, we were super skeptical and the path is very tricky, right? You need to really check out heaps of grants and see which grant and call is fitting for you.

17:20Dr Lilian Schwich:And this costs really a lot of time. And therefore, we also wrote proposals which were not granted. We also wrote R &D proposals, which also are an interesting puzzle piece for our growth. They are probably not the big investive grants, but they are still in the, let's say, 500 ,000 sector where you really can do something with it. So we've talked to political stakeholders. We built up early relationships to really understand which call is searching for and to be with the right idea in the right call. Because this can be actually a showstopper, right? If you have a great idea, but you're applying in the wrong call, you might just not continue.

18:14Dr Lilian Schwich:So this was actually a very strategic project. I would say we were pushing and also we wanted to be absolutely sure that the financial aspects of our grants are bulletproof. That's why we also got professional support in the financing. because frankly speaking, when you are applying for a grant and you do anything which could be potentially already an investment in the scope, you have something we call in German, so damaging to your grant. And therefore it was super important to us to not only know how the grand landscape looks like, but also how we get the financial straight.

19:11Andreas Munk Holm:Here you're describing what I would think can be considered a critique of the current system that we, yes, there's money, but it's very complex to navigate. And some of the rules make it hard for a startup to actually move forward with the things that are important to them because they might be showstoppers later in the grant permissioning process.

19:40Dr Lilian Schwich:Yeah, I mean, I cannot complain because we really actually are quite lucky with the support we receive. but I know from other companies as well that the like let's say time period after filing a proposal until receiving a grant is quite long and therefore sometimes especially hardware companies can really struggle if they really rely on those grants and are just sort of in the waiting line. This can be another challenging part. But I also feel like we shouldn't make Europe worse than it actually is, because there are a lot of, let's say, strategic grants available. You just have to find the right ones and also be with the right project idea to those particular grants.

20:38Dr Lilian Schwich:And then the European Commission or union does a lot in that sense. But I fully agree with what you said. The navigation is quite tricky because there's such a variety.

20:51Carmel Rafaeli:And within these different forms of capital, there's another form of capital that I believe you have a partnership with, which is corporates and the role that they have to play in helping close the gaps and helping grow the technologies. how did you build out those relationships and do you look at them as part of your capital stack or is that more the business development and partnership?

21:16Dr Lilian Schwich:We have two strategic investors from large corporates so Porsche Ventures and RBVC, Bosch Ventures and both of them have of course a vision when it comes to the market we are moving in And so we see their capital as a very strategic sign, how those corporates want to be involved in the battery sector. So, for instance, the collaboration with Porsche Ventures began on a technical level. It began with like proof of concept, a POC project within our pilot line, where we really were discussing with the sustainability department of Porsche. how we could really improve their environmental footprint by the right recycling methods and also enabling access to raw materials.

22:10Dr Lilian Schwich:And this was like the first hypothesis. So we started in actually receiving material from Porsche, which we then processed and discussed the results of the project. And with that being said, Porsche acknowledged that this can be a valuable contributor for their business. And with that being said, we built up also a relationship with Porsche Ventures who really, you know, have to act in the favor of their corporate. This was actually a really nice synergy why we see, of course, business corporations on the one hand side, but having actively, let's say, investments placed in those companies goes beyond just a business symbiosis.

23:01Dr Lilian Schwich:It's just really, let's say, yeah, metaphor for how crucial this market is for the particular corporate.

23:11Andreas Munk Holm:Could you share a bit of your core learnings? What would be your advice to other founders that are trying to wrap their head around and come up with a strong plan for working with corporates? Because unfortunately, there are also many bad stories of offtake agreements that never get fulfilled of POCs that never really come to fruition and so on?