Rare Earth Magnet Startup, Noveon Magnetics, Secures $215 Million in Series C Funding
Yesterday, January 19th, Noveon Magnetics, a U.S.-based manufacturer of rare earth magnets, announced the closing of a $215 million Series C round, led by a $200 million investment from One Investment Management (OneIM). The company stated that this substantial capital injection will support significant growth in its magnet manufacturing capacity across automotive, artificial intelligence, and defense sectors. Additionally, the funding round will facilitate secondary sales for certain existing shareholders.
Rare earth magnets, including those produced by Noveon, are essential components found in technologies ranging from F-35 fighter jets to consumer drones. As the demand for advanced defense technologies increases, so does the need for these magnets. Currently, China processes over 90 percent of the world’s rare earths, while the United States accounts for approximately 1 percent. In the fall of last year, China imposed export controls on most rare earths and the associated processing technology, although these controls were subsequently suspended, resulting in heightened concern among U.S. officials.
In response to supply chain vulnerabilities, recent U.S. administrations have taken measures to secure domestic rare earth resources. Notably, the Pentagon acquired $400 million worth of preferred stock in MP Materials, becoming its majority shareholder, and Congress passed legislation banning the use of Chinese magnets by the Department of Defense, effective in 2027. Consequently, there is growing momentum to reduce reliance on Chinese rare earths and magnets, with companies like Noveon playing a pivotal role.
Founded in Texas in 2014 as Urban Mining Company and rebranded as Noveon in 2023, the company specializes in neodymium-iron-boron (NdFeB) magnets and is among the few entities outside China capable of producing them. NdFeB magnets are widely used in applications where weight and size are critical constraints, such as UAVs, missile guidance systems, and aircraft actuators. Noveon’s proprietary technologies, particularly EcoFlux magnets, offer enhanced magnetic performance while utilizing fewer rare earth elements, a notable advantage given current supply challenges. The company also engages in magnet recycling, converting end-of-life magnet materials into new products.
Noveon has established partnerships with major corporations, including General Motors, LG Electronics, and Nidec Motor Corporation. Last year, it signed an agreement with Kangwon Energy to open a facility in South Korea with a projected annual production capacity of 2,000 tons. According to Noveon, the recent financing will support expansion beyond this capacity, enabling it to meet the needs of current partners and address rising demand from industries requiring high-performance magnetic materials.
OneIM is actively investing in the rare earth sector. Founded in 2022 by Rajeev Misra, former CEO of SoftBank’s Vision Fund, OneIM manages assets exceeding $7 billion and was a major investor in Vulcan Elements’ $65 million Series A round, which also focused on NdFeB magnet technology.