IDTechEx: Has the Funding for Graphene Dried Up

Since its discovery, graphene has endured an extensive period of hype. There was not a problem on earth (or beyond!) for which graphene was not proposed as a solution. That narrative has, thankfully, shifted to targeting more appropriate value-add applications that are beginning to gain commercial success. However, practically no graphene manufacturer is making significant revenue, let alone a profit, so continued funding will still be essential – but is there still enough cash being injected?

IDTechEx forecast the market for graphene material to be at a tipping point with notable orders beginning to arrive. However, those orders are not arriving for everyone, and a period of consolidation is expected over the next 5-10 years as clear market leaders emerge; looking at equivalent mature industries there will not be space for more than a handful. In fact, it is more sensible to see graphene powders and nanoplatelets as options within a broad family of advanced carbons that include MWCNTs, SWCNTs, thin graphite, and carbon black.

In their leading, unbiased market report “Graphene Market & 2D Materials Assessment 2021-2031”, IDTechEx provide global analysis of the manufacturers, applications, and materials. This gives the reader key insights into the graphene industry and a realistic outlook for the market potential.

As mentioned, revenues are still low to modest for graphene manufacturers, and profitability is almost non-existent outside of a few; for a full breakdown see the market report. This is unsurprising given the time it takes for an advanced material to gain adoption in anything more meaningful than a branding exercise. However, this does bring the challenge of funding, which will remain essential for companies to carry on until the profitable booming market arrives.

Funding was not an issue 10-years ago, there were numerous new graphene companies with many raising some significant money and/or going public to further support this. Despite the pandemic, for many emerging technologies the previous 12-months has seen a flurry in early-stage funding and significant money raised with companies going public (mostly via SPAC), but the same cannot be said for the graphene industry.

Of course, funding is not everything; strategic partnerships can be as significant to the future success of a company. The first half of 2021 has seen more of these, with the likes of Sojitz Corporation investing in the promising Singapore start-up 2DM, Huvis and NeoEnpla for graphene fibers, and even Nationwide Engineering with University of Manchester and Versarien for their concrete work.

In 2020, the key graphene funding was mainly related to energy storage with Skeleton Technologies and Nanotech Energy grabbing the headlines. This has not reached the same heights in the first half of 2021, but with NanoXplore and Martinrea forming a joint venture called VoltaXplore and each contributing $4m, Graphene Manufacturing Group going public and being prominent about their aluminium-ion work, and several smaller companies, such as Volexion and Anaphite, making some initial investment announcements, it shows there remains an appetite here. In terms of private funding raised by a graphene manufacturer, Graphmatech’s oversubscribed funding round of 84.5 million SEK (ca. $10m) is one of the more notable so far this year.

Funding does not just have to be external private or public investments; large companies will often start new ventures or business units that can reshape the market. The biggest news stories from the first half of 2021 all surround Gerdau. Gerdau is a Brazilian company and one of the leading steel producers in the world. They have been active in the graphene field for multiple years, and in 2021 the company took their activities a step further and launched a new subsidiary called Gerdau Graphene. It was stated that the focus will be on construction, industrial and automotive lubricants, rubber thermoplastics, paints, batteries, and sensors market in the Americas. This was quickly followed up with supply & distribution agreements with NanoXplore and a MoU concerning a distributor agreement with First Graphene.

There are 4 final areas to consider when looking at the funding developments in the graphene landscape.

• Firstly, there is the area of applied graphene companies. Investment in energy storage companies has already been discussed, but it does not stop there. Companies are not looking to be graphene producers (or masterbatch or liquid dispersed products) but rather take a few steps further on the chain and capture more of the value. ORA Graphene with their headphones, INBRAIN Neuroelectronics with their neural implants, and Cardea Bio with their biosensor all raised further investment in 2021.
• CVD-grown graphene films and wafers should be considered separate from their powder and platelet counterparts. This is at an earlier stage and predominantly targeting different application areas; we have already seen some of the companies using this material highlighted. Major companies have already sunk a huge amount of money trying to make this a success to little avail. Despite this, there is still investment and notable progressions. At the end of 2019, Paragraf raised £16.8m (ca. $21.4m) in Series A funding for their MOCVD approach, and Grolltex closed an oversubscribed round of undisclosed amount. Meanwhile, at the end of 2020, Versarien acquired the assets and IP on CVD production of electronics grade graphene from Hanwha Aerospace for £4.34m (ca. 5.8m); this was followed-up in 2021 with an agreement with Graphene Lab in South Korea with a strategic investment of £1.93m (ca. $2.7m).
• Government-sponsored R&D and academia remains a key area for graphene. Companies cannot rely on grants forever, but it provides necessary input of cash for projects that are looking to bridge the valley of death. The most notable from 2020 comes from the graphene flagship, a central European body for academic and industrial R&D; one of the most notable was EUR 23m (ca. $27.3m) for their CIRCULAR BIOCARBON project that intends to build a biorefinery to create graphene out of urban waste.
• Finally, beyond carbon, there is an exciting area emerging. 2D materials are predominantly at an early R&D stage, one area gaining the most commercial progression is boron nitride nanotubes (BNNTs), the counterpart to CNTs. In 2021, BNNano and Huneed Technologies announced a strategic announcement, and BNNT Technology, a subsidiary of PPK and Deakin University, announced a scale-up of capacity and progressions in lithium-sulfur batteries. See the market report “Carbon Nanotubes 2021-2031: Market, Technology, Players” for more information on CNTs and the “Graphene Market & 2D Materials Assessment 2021-2031” for a deep dive into the status of the broader 2D material family.

In summary, funding and commercial activity are still very much alive in the graphene industry. There is a range of joint ventures, acquisitions, IPOs, funding rounds, and strategic partnerships & investments still taking place. The challenge is the amount; to be a large-scale player (either as a manufacturer or further up the value chain) and compete against incumbent materials or other emerging solutions, particularly for energy storage, will take a large amount of capital. Obviously, there are internal company investment/spending and public companies raising money not discussed; much of the funding quoted in this article is interesting but, in many cases, will be just to keep the company afloat or get started rather than enable significant growth.