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Partnering with Ion Storage Systems

At Z2Sixty Ventures, we’re proud to have supported Ion Storage Systems (ION) with their Series A funding. ION recently closed its Series A funding round and exceeded its original target of $30 million. Toyota Ventures, Tenaska, and Bangchak Corporation along with other investors, including Z2Sixty Ventures, joined the investment round led by Clear Creek Investments, VoLo Earth Ventures and Alsop Louie Partners.

Ion Storage Systems (ION) is developing a new battery technology that can be used across several industries, including electric vehicles, defense, consumer products and grid energy. ION creates hihgh energy density solid state lithium batteries that are safer, lighter and enable form factors with tighter packing density that enhance system performance. ION’s nonflammable technology offers safe operation, greater abuse tolerance, and both volume and weight reduction.

ION first came on our radar in the spring of 2021 having met Dr. Eric Wachsman, Executive Chairman and Founder, at a DeepTech conference hosted by our friends at the University of Chicago Polsky Center. We were then introduced to Ricky Hanna, CEO, and the rest of the ION team. We were very impressed with the caliber of the management team which combined a very strong technical and research background with a strong business and operational background. We also spent time with Mark Fields from Alsop Louie, the lead investor in ION’s prior seed round, to understand their views and continued support in the company. In our view, the battery industry represents one the most attractive areas within Z2Sixty Ventures’ thesis surrounding a smart, sustainable, and impactful society with ION having the potential to become a meaningful player in the market.

Some of the highlights driving our investment decision include:

High caliber management team. As part of our initial discussions with Mark Fields, we learned a lot of about how Alsop Louie's investment decision was tied to hiring someone of Ricky’s caliber. We are also similarly impressed with Ricky as the CEO. We saw the hiring of Ricky as key because it combines both the underlying technology understanding but also the commercial expertise and network to build the organization. We see Ricky as a strong leader to guide ION in this next stage of growth. From a technical standpoint, Dr. Wachsman, Chairman and Co-Founder, is one of the leading experts in the field for solid-state batteries and well-respected by his peers. We believe under his guidance as well as Greg Hitz, Co-Founder and CTO, Ben Chiu, CFO, Liz Santori, VP of R&D, and Neil Ovadia, VP of Operations, ION will be able to make the technological and commercial advancements of solid-state batteries.

Huge market potential driven by growing demand globally for electric vehicles. Environmental concerns and increasing regulation surrounding the traditional internal combustion engine (“ICE”) along with increasing consumer demand is causing a shift from ICE to EV given the benefits for lower emissions. However, the near-term dynamics of EV vehicles powered by lithium-ion technology are facing headwinds around raw material costs, performance, and safety. These headwinds have the potential to slow down overall adoption. While solid-state batteries are more likely to be commercially adopted in the mid-term, it has more competitive advantages over lithium-ion, particularly allowing EVs to travel farther, charge faster, and provide more safety. Meanwhile, solid state batteries have the opportunity to generate further demand in other end markets. With regards to ION in particular, their solution is not affected by nickel and cobalt price fluctuations affecting the broader market.

Support for ION’s technology & team by tier one third parties. Based on our due diligence we see evidence that is supportive of ION’s ability to bring the technology to market and potentially garner strong tier one customer support. ION’s solid-state battery will provide significant benefits on safety, energy density, charging time, operating temperature, and cell design/product integration. We believe ION’s traction with various evaluation partners provides them with further support to become a leading player. We applaud management’s on-going discussions with various established industry leaders in defense, consumer electronics and automotive manufacturers.

Strong path to commercialization. We recognize that ION would be a key component to a world-changing opportunity in energy sustainability and the required capital and level of expertise and partnerships will be high. Although we don’t believe this is a winner take all scenario, the high minimum efficiency scale for this sector as evidenced historically in lithium-ion batteries, would indicate that there will be a couple of players in this market. We believe ION’s current path to commercialization will allow the company to not only improve the technological effectiveness of their battery, but also provide a rapid manufacturing learning curve that can be utilized for the larger EV market and increase their overall competitiveness.

Strong ESG fit. From an ESG perspective, we recognize the strong benefits that ION’s product can provide to overall climate change mitigation and sustainability. We also view the diversity of the Board and management team as strong indications of ION’s support for diversity, equity and inclusion.

Overall, we're excited to be a partner in ION’s incredible journey.

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