A $1 Billion Payday From Google For Battery Startup Form Energy
Since it launched nine years ago, next-generation battery developer Form Energy has faced a single skeptical question: Do businesses really need a battery that lasts 100 hours or longer?
Google appeared to answer that question this week with a deal that will pay Form roughly $1 billion for a sprawling, 30 gigawatt-hour battery system to back up a new data center to be built later this decade in Minnesota. That is enough capacity to power 210,000 homes for four days.
On Tuesday, Google announced an agreement with power utility Xcel Energy to provide 1.9 GW of wind, solar and battery power for the data center, which the tech giant will build in Pine Island, Minn. Xcel will use Form’s iron-air batteries for long-term backup and standard lithium-ion batteries for instant surges of power.
Google’s move comes as President Donald Trump has pressured big tech companies to supply the power for the AI data centers they are building. Trump repeated the demand in his State of the Union address Tuesday.
Google and Xcel did not disclose the deal’s total dollar value, but Form CEO Mateo Jaramillo said the cost of his company’s piece of the project was roughly $1 billion.
The deal could mark the bottom of a dire period for next-generation Western battery startups. For more than two years, they have generally had difficulty raising new funds, leaving many struggling to survive and some going bankrupt. It’s a long way from the wave of initial public offerings these firms saw in 2020 and 2021.
Form is currently attempting to raise a $500 million round, Jaramillo said, and he plans to take the startup public next year. He declined to disclose what valuation he is raising the funds at.
Form has raised $1.4 billion to date. It last raised money at a $3.4 billion valuation in late 2024. Its lead investors for that round were Breakthrough Energy, Capricorn Investment Group and GE Vernova.
It was the first time Jaramillo confirmed the size of his fundraise, along with the timeline for Form’s IPO. Axios previously reported Form’s fundraise and its hopes to go public, citing anonymous sources.
Jaramillo, who previously worked at Tesla, where he helped to launch the Powerwall, its first stationary storage battery, said the Google deal will help him with the current fundraise since the database project is related to AI.
The deal squashes at least some skepticism about Form. The doubts have stemmed from a couple of things. For one, there are no current large-scale commercial deployments of iron-air batteries, the type Form has developed and is ramping up. In addition, many industry veterans have questioned whether there will be much demand for large batteries whose main selling point is that they last for four days.
“It really took this project to have [our thesis] externally validated,” Jaramillo said.
What sets an iron-air battery apart is both the cheapness of iron, one of the most plentiful metals on the planet, and how it works. Essentially, the battery derives energy by allowing iron to turn to rust, and then reversing it back into iron.
The process is massively inefficient. The battery loses up to half its energy in the charge-discharge cycle—a standard lithium-ion battery loses just a few percentage points. But Form has argued that an iron-air battery is so cheap and lasts so long that the energy loss is justified. Matched with renewable energy, which tends to deliver excess power at certain times, the lost energy hardly matters.
Most stationary storage batteries last around four hours. Jaramillo argues that at 100 hours of duration, Form’s batteries ought to earn consideration as a form of reliable base power, as natural gas and nuclear power plants are.
As an example, he said that an iron-air battery would come to good use when extended extreme weather conditions stretch grid capacity to its maximum. Over a 10-day period, the utility could draw power from the battery for 10 hours a day. The battery could keep delivering power without a recharge, “because you don’t want to add incremental stress to the grid,” he said.
Another part of the justification for Form’s batteries is that the federal government is subsidizing it. In 2024, the Department of Energy awarded the company a $150 million grant to expand its Weirton, W.Va., factory to an annual production capacity of 500 MW. Jaramillo said Form would begin production at the plant in 2028, and working at full capacity it will be able to fulfill the Google contract in about seven months.
In addition, Jaramillo said, the Google project qualifies for a significant tax credit under the Inflation Reduction Act, passed under former President Joe Biden. The base credit would be 30%, but the credits could rise to half the project’s costs because it’s using U.S.-made iron and will be located on the site of a coal plant.