How liquid-metal battery maker Ambri ended up on the auction block

Last year, liquid-metal battery maker Ambri set out to raise a $300 million Series F funding round. The money would have fueled its ambitious manufacturing plans, and made good on contracts it had signed for a 140,000 square foot facility in Milford, Massachusetts. 

But the round’s lead investor backed out at the last minute, tanking the round.

So Ambri switched gears. Its back-up plan was to secure a $50 million bridge loan from its current investors: a “pro rata” raise based on their existing equity in the company. But that loan effort again came up short when a second investor declined to participate.

Last week, lacking other options, Ambri filed for Chapter 11 bankruptcy.

That second investor, Latitude Media has learned, was Reliance New Energy Solar, a subsidiary of Indian conglomerate Reliance Industries. The company participated in Ambri’s $144 million Series E round in 2021, and now holds roughly an 18% share of Ambri’s equity. But Reliance declined to put up its share of the bridge loan, which would have amounted to around $8 million. 

Without that extra cash, Ambri couldn’t cover the initial phases of its manufacturing expansion, and filed for bankruptcy — in large part to get out from under the ten year lease on its Massachusetts facility.

Ambri chief commercial officer Adam Briggs told Latitude Media that by some metrics, the company was doing well. Ambri had strong demand from a pipeline of developers, utilities, and IPPs, totalling around $1.7 billion in MOUs. And it expected to sell out the production of its planned Milford factory for three years. But while building Ambri batteries isn’t particularly costly — the company’s design is “a lot simpler” than lithium-ion, Briggs said — “building a battery plant from scratch is expensive.” 

Hence the need for another round of fundraising. Ambri hoped the benefit of IRA manufacturing incentives would prove a “very strong motivation for investors,” Briggs said, but they ultimately couldn’t come through. “We almost got there, but we didn’t.”

The path to the bridge 

Ambri, whose highest profile investors include Bill Gates and hedge fund manager John Paulson, has been working on building industrial-scale, long-duration, liquid-metal batteries for over a decade. The company was founded in 2010 at MIT, and has gone through a series of tech adjustments and setbacks, leading it to lay off around a quarter of its staff in 2015.

But according to Briggs, Ambri was nearing commercialization when it hit those financing snags last year. The batteries are “very close to being commercially ready from a cell tech perspective,” he said, and are on par with lithium-ion in installed cost per kilowatt-hour.

Ambri planned to both own and operate its manufacturing footprint, and Briggs said the company had a lead investor verbally committed to a Series F, with a number of follow-on investors “who looked poised to round it out and put us on track to our goal.”

In June 2022, with the expectation of imminent new funding, Ambri agreed to lease an old retail center about an hour southeast of Boston, previously home to a Home Goods and a Stop & Shop, and invested around $18 million into retrofitting it for battery manufacturing, according to court filings.

Also in 2022, the company signed an agreement with Reliance to deploy an Ambri battery pilot system; the two were reportedly planning to set up manufacturing in India. The pilot system was set to ship last year, but Briggs confirmed that it never got out the door due to Ambri’s struggle to raise money.

Then, the lead investor pulled out of the Series F raise for reasons that were never made clear to Ambri, beyond an assurance that they were unrelated to the battery maker. Briggs declined to name that investor — though it was not Reliance. 

In the wake of that news, Ambri scrambled to find additional financing. Its failure to do so ultimately came down to poor timing, Briggs said. 

“Basically the time from which we got that notification to the time we had to make a decision to lay off two-thirds of our staff was about six weeks,” he said, adding that the timeline was made particularly tight by the fact that much of the period fell in August, when business tends to slow. “That was just a really difficult time in 2023 to cultivate a lead investor,” he said.

…and then to the auction house

Once it became clear that plans for a Series F were shot — and Ambri’s manufacturing ambitions with them — the company sought to keep a scaled-back version of its plans in place.

In September, Ambri turned to its existing investors for the ultimately unsuccessful $50 million loan that would have converted to equity in the company’s eventual next raise. 

With the unexpected $8 million gap left by Reliance, Ambri had to cut costs further, Briggs said. It cut around two-thirds of its workforce, who left the company in November.

Armed with just $42 million via the bridge loan, Ambri continued exploring “all different types of options,” Briggs said. 

He described the leadership’s thinking at the time in this way: “We’ve got to figure out a way to reduce our expenses so we can make the money we do have left allow the company to continue to build its cell technology, so that it is reaching the stage of commercialization, and could survive to a future state where we could raise capital.” 

In the end, it came down to cost-cutting — in addition to the mass layoffs, Ambri needed to get out from under its long-term loan for the Massachusetts factory. And to do that, it needed to file for bankruptcy, Briggs said.

“We tried a lot of different alternatives to filing Chapter 11,” he said. “Ultimately it felt like we had to resort to this as the only viable pathway forward.”

What’s next for Ambri?

Post-bankruptcy filing, Ambri is pursuing a new licensing strategy for its batteries, Briggs said: either direct licensing or through joint ventures with company partners. 

The tech is intact, he added, and its development has continued at its original expected pace, because the November layoffs preserved the core product team.

When Ambri goes up for sale later this summer, the investors who signed on to the bridge note will act as “stalking horse bidders,” using Ambri’s bridge loan debt to set a $38 million price floor. 

It’s still too soon to know whether those investors will buy the company, or whether a third party could come in and raise the bid, Briggs said, though Ambri is working with an investment banker to encourage additional bids. According to court filings, potential bidders have until June 20 to step up and make an offer.

Briggs said the last 18 months served as a real “aha” moment for Ambri, despite the chaos that has ensued. 

 “We learned that there’s a tremendous opportunity for a non lithium-ion battery that was also non-EV, that had the capability of strong economics for long-duration applications,” he said. The majority of the demand Ambri saw last year was for durations of eight hours or longer, he added, demonstrating that the market niche is still wide open.

“The Ambri tech seemed to hit a note with the mainstream grid-scale energy-shifting market...It was just what people were looking for,” Briggs said. “There’s a tremendous amount of disappointment in the minds of our customers that we are not poised to deliver these batteries. At this point, all we have is uncertainty as to when and how we’ll be able to do that.”

Reliance New Energy Solar did not respond to Latitude Media’s request for comment at time of publication.