Recently, Chris Metinko of Mergermarket, spoke with Harrold Rust, Enovix CEO and co-founder, about funding, how we’re dealing with the COVID-19 global pandemic and key aspects of our business model. Here’s a link to the article published on April 16, 2020 (which may require a subscription to login). Following is full text of the article.

Enovix Could Look to Top Off Raise Late This Year Despite COVID-19, CEO Says

Enovix expects to top off its recent USD 45m raise with as much as USD 20m by the end of the year as it opens its 3D silicon lithium-ion battery production facility, said Harrold Rust, co-founder and CEO.

The Fremont, California-based battery technology company expects to open its first production facility this fall and does not anticipate the current pandemic disrupting that timing since it is still several months away.

Rust said Enovix does not anticipate having trouble bringing in another strategic or financial firm to add USD 10m to USD 20m to the USD 45m round, which was announced 31 March. The current raise was led by a USD 25m strategic investment from an unnamed California technology company and that commitment continues to keep investors interested in Enovix’s new batteries for consumer products, said Rust.

Since being founded in 2007, the company has raised more than USD 200m in venture, strategic and private funding. The company plans to use most of its funding to complete its battery production facility.

Despite the current coronavirus crisis, Enovix has the financial ability to weather the downturn in the economy, said Rust. The company has enough capital to give it at least 12 months of runway, and it also could shift down production of its batteries to lessen costs if the crisis persists, he added.

Enovix already has signed four agreements with large electronics companies to develop and produce its silicon lithium-ion batteries for consumer electronic devices. Those batteries have about twice the life of most batteries in consumer devices, said Rust. Those contracts could be worth USD 250m in annual revenue once fully executed.

Enovix anticipates shipping its first batteries in 2Q21, after which it may look to raise more capital, he added. By 2022, Rust said he believes the facility could be producing enough to give Enovix a USD 50m to USD 100m revenue run rate.

The company sees a large USD 10bn consumer market ahead of it, placing its batteries in tablets, phones, computers, smartwatches and more, said Rust. Enovix also would like to work with automobile manufacturers to develop its battery technology for the electric vehicle market, although that still is several years away. It remains focused on the consumer market in the near term, said Rust.

Competitors in the consumer battery market include Murata Manufacturing, LG Electronics, Amperex Technology Limited (ATL) and Samsung Electronics, said Rust.

About 75% of the equipment and processes in Enovix’s battery facility are identical to standard lithium-ion battery manufacturing, said Rust.

Due to those similarities, the company also is interested in partnering or licensing with battery companies so those manufacturers could make similar 3D batteries with Enovix receiving a percentage of revenue, said Rust. That plan could help reduce the cost of building new manufacturing facilities, he said.

Batteries with a 3D cell architecture can produce more energy and have longer life cycles since its more vertical structure stacks silicon anodes and cathodes. The stacking allows more pressure to be applied and keeps the silicon particle connection better than traditional batteries with more horizontal architecture.

Enovix has no planned exit, and while it believes it can be its own stand-alone company, Rust agreed other battery makers could become suitors, especially as the company talks with them to be partners. However, he added the company is not looking for that currently.

Investors in the company include Cypress Semiconductor [NASDAQ:CY] — currently being acquired by Germany-based Infineon Technologies [ETR:IFX]) — as well as DCM Ventures, Intel Capital, Qualcomm Ventures, Rockport Capital, Sofinnova Ventures and Trinity Ventures.

Enovix was founded in 2007 as microAzure, a play on IBM’s [NYSE:IBM] “Big Blue” nickname since many at Enovix came from that company. Since that time the company has been focused on making a better, longer-lasting battery. However, in 2017, the company pivoted away from its original battery design on a silicon wafer to a more traditional manufacturing method while still using its 3D architecture, said Rust.

The company has 73 employees and expects to be twice that size by the end of 2021, said Rust.

The company uses Cooley LLP as its legal adviser.