Amazon’s first five climate fund investments include Redwood Materials, Rivian

Redwood Materials, the recycling startup founded by Tesla's longtime CTO and co-founder JB Straubel, has landed Amazon as a new investor and customer.

Amazon's investment in Redwood Materials is one of a handful announced Thursday that stems from the e-commerce giant's $2 billion Climate Pledge Fund. Amazon announced in June that it would commit to invest $2 billion in sustainable technologies and services that will help it reach its commitment to have net-zero carbon operations by 2040.

Amazon said Thursday that the first recipients of its $2 billion fund also include CarbonCure Technologies, which developed technology that consumes carbon dioxide in concrete, climate technology company Pachama, electric automaker Rivian and Turntide Technologies. Amazon didn't disclose the amount of the investments.

At least one of these investments has already been announced, although without the specific detail that the funds were coming from the climate fund. For instance, Amazon, an existing investor in Rivian, was a named a participant in the electric automaker's $2.5 billion round in July. Rivian said 2019 it was developing an electric delivery van for Amazon using its skateboard platform. Amazon ordered 100,000 of these vans, with deliveries starting in 2021.

While Amazon's interest in Rivian has been public for more than a year, the other investments have been unknown until now.

However, there were hints earlier this month that Amazon might have an interest in - and at the very least an awareness of - Redwood Materials. The startup, which launched in 2017, recently raised $40 million from investors, including Capricorn Investment Group and Breakthrough Energy Ventures, the environmental-focused fund launched by Bill Gates that includes Amazon founder and CEO Jeff Bezos as a board member. It's possible that Amazon participated in that $40 million raise.

What's perhaps more important than the investment amount is the relationship that has been established. Redwood Materials will also help Amazon recycle lithium-ion batteries from its electric vehicles as well as e-waste from other parts of Amazon's businesses and reuse their components.

Redwood Materials, a recycling startup based in Carson City, Nevada, is aiming to create a circular supply chain.

We've made maybe more progress than some people may think and we're actually running recycling operations and have revenue from those," Straubel told TechCrunch. In terms of customers, we have customers on both sides of our company - on the incoming side there is material we recycle for companies and then on the outgoing side there are chemicals and materials that we sell back into the supply chain."

Redwood already has customers on both sides of the business, Straubel said, although Panasonic and now Amazon are the only two that have been publicly named. Redwood is recycling the scrap from Panasonic's battery cell manufacturing operation at the so-called Gigafactory it operates with Tesla in Sparks, Nevada. The company also has customers - that have yet to be named - on the consumer electronics side, Straubel said.

We're recycling and processing things as diverse as cell phone batteries, laptop computers, power tools, power banks, scooters and electric bicycles," he said. So it's a kind of an amazing diversity of small- to mid-range applications that today really struggle to find a good solution. The recycling rates of those materials in particular are really atrocious in the market."