$90M Acquisition of Sakti3 One of Year’s Biggest Cleantech Deals

Last year, Dyson—the global manufacturer of vacuum cleaners, fans, hand dryers, and other products—announced it had invested $15 million in Ann Arbor, MI-based advanced battery company Sakti3. Wednesday, the University of Michigan announced the spinout startup has been acquired by Dyson for $90 million.

Makers of consumer goods are hungry for more powerful battery technology that would enable less frequent recharging. Dyson’s head of R&D, Mark Taylor, said in an article last year that the company was a few years from incorporating solid-state lithium batteries like the kind Sakti3 has pioneered; it would seem with this acquisition that Dyson is going full steam ahead with power-source innovations.

In a press release, Ann Marie Sastry, co-founder and CEO of Sakti3, said, “Dyson, just like Sakti3, is driven by a desire for audacious leaps in technology.” Sastry will reportedly lead development of her technology as an executive for Dyson.

Dyson’s founder, James Dyson, told USAToday that his company will need to invest $1 billion in a manufacturing facility in order to produce new solid-state lithium batteries, and he didn’t rule Michigan out as a possible location. Neither Sastry nor Dyson would say whether the batteries will be further developed for electric vehicle applications, though Dyson said it was possible his company would eventually license Sakti3’s battery technology to other interested parties.

According to PitchBook, the Sakti3 acquisition represents one of the biggest national cleantech deals of the year, and it’s expected to be one of the top Michigan deals for 2015, as well. Ryan Waddington, managing partner of Huron River Ventures, an Ann Arbor-based VC firm with a focus on cleantech, said he can’t think of a bigger cleantech exit in the state in the past five years. Sakti3’s past investors include General Motors and Khosla Ventures.

“It’s certainly a big win for Ann Marie, GM, Beringea, and for the University of Michigan,” he added. “I’m very happy for all of them and as a Michigan cleantech investor, it’s great to see.”

Jean Redfield, who runs the Detroit cleantech incubator NextEnergy, said the Sakti3 acquisition is a “big, next step” in scaling to commercialization, which is important for Michigan. We talk a lot about Michigan’s innovation strengths, she said, particularly in biotech, transportation, and advanced manufacturing, but getting a product like a battery to market is a fairly difficult process.

“While biotech start-ups follow a pretty well-established route to commercialization, manufactured products—with the heavy capital needs necessary for scaling—are much more challenging,” she said. “Typically, firms can’t get the capital they need to build plants without customer orders, and customer orders don’t come until they can produce a qualified product at scale. This acquisition, at this stage, is a great example of bringing mid-term investment plus a large customer active in diverse end-use markets to a start-up.”

Sarah Schmid Stevenson is the editor of Xconomy Detroit/Ann Arbor. You can reach her at 313-570-9823 or sschmid@xconomy.com. Follow @XconomyDET_AA

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