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Lithium Ion Batteries Case Study

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A123 Systems History of Lithium-Ion Batteries Rechargeable battery evolution accelerated as the world transitioned to instruments enabled by silicon microchip technology from those of bulky electrical components. Mobile devices were designed to be powered by lightweight energy storage systems. The development of batteries for this rapidly evolving market was challenging: • The nickel cadmium battery had been the only option for modern electronics for many years. It was a great improvement over carbon batteries. • Later, nickel-hydride batteries became the technology of choice. • Lithium-ion batteries became available in the 1990s, offering higher energy densities. This technology won out nickel-hydride. The lithium-ion …show more content…

Howard Anderson was the founder of the venture capital firm “Yankee Tek” and a lecturer at MIT Sloan School. He had previously funded two of Fulop’s previous ventures and gave him office space to be an “entrepreneur in residence” while he sought his next venture. Fulop began investigating innovations in the battery industry and discovered Chiang’s research lab. He was enthused by the self-organizing battery concept and the opportunity for a battery with four times the energy density of the available lithium-ion technology that could be charged one hundred times faster. Both Chiang and Fulop decided that the new venture would be an early stage company dedicated to further development of the self-assembly battery. They brought on Bart Riley as the R&D leader (he had spent 11 years at Chiang’s company “Superconductor”). A123 negotiated an exclusive license to the key patent filings from Chiang’s lab with MIT’s technology and licensing office. A123 put together the first round of financing of $8.3 M in December 2002 (Northbridge Ventures, Sequoia, Sparta Group, Yankee Tek and MIT’s Venture Fund). Four months later, an additional $4m was raised from Motorola and Qualcomm, both incredible technology companies and users of lithium-ion batteries. Howard Anderson (Yankee Tek) saw these corporate investments as

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