Investment Notes: SunDrive
Blackbird is pleased to further our investment in SunDrive, leading the company’s $5M Series A round.
Blackbird is pleased to further our investment in SunDrive, leading the company’s $8M capital raising, comprising a $5M Series A round alongside a $3M grant from the Australian Renewable Energy Agency. I’ll be joining the board with this round.
SunDrive have made great technical strides since their seed round in 2018, which has only reinforced our conviction. Last year, SunDrive developed the most efficient industrial-size solar cell ever created in Australia, proving their approach could not only work in lab sized samples but that they could also push the frontier of higher efficiency, next generation solar cells!
SunDrive hopes to accomplish three things with this round:
- continue their pursuit of further improving solar cell efficiency,
- scale their technology to prove it works in solar panel form, and
- develop an automated prototype production line (defined as producing one cell per minute).
Following this, they will raise further capital and be on the cusp of scaling up their manufacturing and generating their first revenue.
One-fifth of the world’s industrial silver consumption is used in solar cell manufacturing, but today solar only provides 3% of the world’s electricity. If solar is to fulfil its destiny in providing the earth’s power, a dramatically different approach is needed.
Copper will help solar panels take a leap down the cost curve and scale to provide the world’s energy.
For solar to reach its full potential, solar cells need to be more efficient, and copper is key to unlock the floodgates of more efficient solar cell structures (like Heterojunction and Tunnel Oxide Passivated Contact).
We have become numb to the relentless progress of solar panels getting cheaper and cheaper, but we can’t take that for granted. In the past few years, great leaps forward have been replaced by micro-efficiencies and the rate of decrease in cost has slowed.
The use of silver is the most expensive step in converting a bare silicon wafer into a finished solar cell. At this point, the raw cost of silver is actually a big contributor to the overall price of a solar panel. The price of silver has spiked higher as society doubts the value of money, with record low interest rates and rampant government spending.Copper has no such problems. As well as being much more abundant and 100x cheaper than silver, the price of copper is the same as five years ago.
How Will SunDrive Make Money?
SunDrive does not want to manufacture the entire value chain. This is too well established by large, mainly Chinese, businesses who produce at wondrous scale.
Rather, the business model of SunDrive will focus on solar cell metallisation - the last but most critical step in the solar cell production process. They will also target emerging next generation solar cell structures (such as Tunnel Oxide Passivated Contact or Heterojunction) which currently require 2-3x more silver per cell than today’s solar cells. The silver component in these cells counts for almost half the processing cost of converting a bare silicon wafer into a finished solar cell. They will receive partially fabricated cells from an existing manufacturer, apply their copper plating process and then either return them to the solar panel manufacturer for finishing or turn them into their own SunDrive panels ready to be installed. Key to their technology is not only the process but developing and building the machines that make it happen.
With this Series A, SunDrive hopes to complete their first automated prototype production line in their new facility at Kirrawee, in Sydney’s south. In two years, they hope to have the line producing one cell per minute in a fully automated way.
This will be the key milestone for a larger round that will let them ramp up their production and receive their first revenue with software-like margins.
Like SunDrive, we see a future world where the cost of solar will be dominated by raw material costs. As the sunniest continent in the world, Australia is best positioned to take advantage of this future. Through our country’s large raw material reserves and SunDrive’s technology, there is the opportunity for Australia to transition the world’s energy to a sustainable future.