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The most anticipated IPO of the year is imminent - Northvolt

Jamie Cameron
10. 4. 2023
4 min read

One of the most anticipated stock market entries in a long time - the super green and super high-tech leader in electric vehicle batteries Northvolt. The popular company seems to be making investors happy and will soon go public.

"We have been working for over a year to put all the processes and internal controls in place, and then it will be up to the market to judge. We'll see what the market looks like in the next year or two," says Andreas Pettersson Rohman, vice president of corporate finance and investor relations at Northvolt.

These comments confirm that battery technology fans might be eager to see Northvolt actually go public.

Given the potential size of the IPO and the number of European companies that have recently decided to go public in the US, Northvolt's choice of exchange will be scrutinized very carefully.

All options are on the table for the company. "For example, a dual listing would mean more work" for the company's small finance team as the firm continues to focus on scaling and growth. "Then we need to look at which market would give us a better valuation," says Pettersson.

https://www.youtube.com/watch?v=P1kQ6ozFb9Q

But going public isn't a cakewalk. That's why Northvolt decided to raise $8 billion from automakers, pension funds, banks and even private investors. The last time the company was valued by investors at 11 billion euros was in 2021. Pettersson, a former director of Swedish investor EQT, joined Northvolt in 2020. And although he hasn't taken any company public yet, it's likely that he will do just that for Northvolt.

Part of the preparation for the IPO was to show that the company is indeed green. Unsurprisingly, Northvolt received the highest rating.

And when will the IPO happen? Two windows are likely - November and December 2023 or May to June 2024. There are many options for Northvolt's listing. The company can choose Europe or the US. But Northvolt needs money from investors. And a lot of it. It will need roughly double the $8 billion it has already raised tocomplete all of its planned factory projects, but Pettersson is in no hurry.

The challenge for Northvolt, however, Pettersson says, is that its business often doesn't fit the investors' framework.

"We don't fit the frameworks of traditional investors - we don't have a proven track record and we are too capital intensive for others - the ones we have been able to bring in are those who are comfortable going outside their frameworks. We have been able to give them confidence in their due diligence."

What is Northvolt?

Northvolt is a Swedish company focused on the production of lithium-ion batteries. It was founded in 2016 by Peter Clafs, a former Tesla executive, and other investors. Northvolt aims to become a leader in sustainable and scalable battery production for electric vehicles and renewable energy.

Its strategy is based on the following pillars:

Sustainability. Northvolt places great emphasis on maximum environmental and sustainable production. It uses renewable energy and recycles all waste. The goal is emission-neutral batteries.

The best technology. Northvolt leads in the development of new types of cathodes, anodes and electrolytes that provide higher energy, longer range and safety. It is working with a kind of "ultimate" battery for electric vehicles.

Europe in particular. Northvolt wants to put Europe at the top of the global lithium-ion industry. Its first gigafactory will be built in Sweden and will help the Union to become independent from Chinese suppliers.

Scalability. Northvolt wants to maximise production capacity through innovation and automation. The goal is to reach terawatt-hour battery production capacity by 2030, which would meet up to 20% of global demand.

Northvolt profiles itself as a clean technology company focused on sustainable and highly scalable next-generation battery production. It has great growth potential, but also the risks associated with new industries and technologies. It is of interest to investors with a long-term horizon who believe in the future of the sustainable energy and electromobility market.

What about you? Are you thinking about buying Northvolt shares after the IPO?

Disclaimer: This is in no way an investment recommendation. It is purely my summary and analysis based on data from the internet and other sources. Investing in the financial markets is risky and everyone should invest based on their own decisions. I am just an amateur sharing my opinions.

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