(Bloomberg) -- A battery startup has raised $20 million in Series A financing, which it will use to scale its proprietary technology that has the potential to address one of the industry’s biggest issues: fire risk.  

Lithium-ion batteries power everything from electric vehicles to cell phones. But concerns around battery safety have hindered the growth of the EV market in some regions and thrown a wrench into the grid’s clean energy transition.  Anthro Energy Inc. — which includes the Department of Defense in its customer base — has developed a polymer electrolyte that it says can make batteries safer and more energy-dense, both key attributes as the batteries become a bigger part of the energy transition.

Today, most lithium-ion batteries are made using a highly flammable liquid electrolyte, which can be an issue if the battery fails or overheats. High-profile battery and electric vehicle fires in recent years have in some cases resulted in fatalities and damage to infrastructure. Anthro’s alternative solid electrolyte material isn’t flammable and also imparts mechanical strength to the cell. Those properties help prevent short circuit incidents that may cause battery fires, while helping the battery also achieve improved cycle life, according to founder and Chief Executive Officer David Mackanic.

“The only reason batteries aren’t blowing up all the time is because the engineers building them have put so much effort into trying to make them safe,” Mackanic said. “As we’re trying to create this next-generation electric revolution, we’re pushing up against that edge of safety.” 

The company has contracts with the Department of Defense, which is testing Anthro’s battery cells with the goal of improving the safety and energy density of soldier-worn batteries and electrifying its vehicle fleets. Mackanic declined to name other signed customers but said that they include household names in the consumer electronics sector. 

The oversubscribed funding round was led by Collaborative Fund with existing investors also joining, including Union Square Ventures, Laurene Powell Jobs’ Emerson Collective and Voyager Ventures. The financing will go towards building a pilot facility in the Bay Area that will produce electrolytes to be sold to large-scale battery manufacturers as well as a small number of battery cells. The commercial-scale facility will be operational by the end of the year, with product shipments beginning by 2025, according to Anthro.

Electrolyte innovation has been slow because it can require different manufacturing processes and, by extension, different equipment, according to Evelina Stoikou, BloombergNEF’s energy storage senior associate. “It’s very capital intensive to build pilot and manufacturing lines for these types of technologies,” she said.

San Jose, California-based Anthro’s differentiator is that its electrolyte is a drop-in technology that wouldn’t require battery manufacturers to make any changes to their process, according to Mackanic. Despite these advantages, the startup’s current electrolyte production costs are about twice that of producing conventional liquid electrolytes, due in part to the cost of its materials. He expects to be able to get that down to a 10% to 20% premium at commercial scale. 

In the short term, Anthro will target customers who are willing to accept smaller quantities of product as well as pay a premium for safety, with a “clear sightline to coming down the cost curve as the company scales,” according to Sophie Bakalar, a partner at Collaborative Fund.

(Updates with information about the Department of Defense's current stage of use and end applications of Anthro's technology in paragraph 5.)

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