Earlier this year, we reported on Tesla’s former Vice President of Supply Chain Management, Peter Carlsson, launching a new startup called Northvolt with another former Tesla supply chain executive, Paolo Cerruti, to build their own battery gigafactory.

They are now reportedly about to close their first major round of financing to bring the factory into reality.

Tesla has been calling its battery factory a “gigafactory” because it will have an annual production capacity of several gigawatt-hours (GWh) of energy storage.

Northvolt also plans for their factory to produce gigawatt-hours (GWh) of batteries.

Like Tesla’s Gigafactory, it requires a large investment of around $4 billion.

Now they are raising their first major round of financing after a $14 million seed round, which included an investment from Vattenfall, Sweden’s largest electric utility.

Carlsson told Bloomberg in a phone interview this week that the round is aiming for 100 million euros ($118 million) and they are raising it by cementing partnerships with future clients, which could include automakers.

He said:

“Coming out of this partnership round and going into a larger financing round next, we see that it will look favourable to the financial market that we have a number of customers that have already shown commitment by investing in us,”

The next round will be a larger one ($1.2 billion to $1.4 billion) to finance the first phase of construction of the plant, which they expect will start during the second half of 2018.

The actual start of production is expected in 2020 with a capacity of 8 GWh per year and they aim for 32 GWh of capacity once the entire factory will be completed in 2023. It’s comparable to Tesla’s expected production capacity in 2018 for Gigafactory 1 in Nevada.

During the interview with Bloomberg, Carlsson also revealed that Northvolt narrowed down their search for the site of the factory to just two locations in Sweden: Vasteras near Stockholm and Skelleftea in the north.

They were previously looking at several more locations across Europe.

In a previous interview, Carlsson said that they aimed to produce advanced li-ion battery cell in different formats with a cost below $100 per kWh.

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