Alqem Secures €8 Million to Develop Rare-Earth-Free Magnets
A Munich and Coimbra-based deep-tech startup, Alqem, has successfully raised €8 million in pre-seed funding. This investment round was co-led by UVC Partners and Union Square Ventures.
Founded by the creators of Alexandria, a significant open materials database, Alqem aims to tackle the challenge of producing rare-earth-free magnets. Currently, China dominates this market, accounting for roughly 94% of the global supply, according to the International Energy Agency (IEA). Notably, there hasn’t been a major advancement in permanent magnet chemistry in over 40 years.
Dr. Hanh Nguyen, co-founder and CEO of Alqem, expressed the potential impact of their work, stating, “For the first time, we have a map of the materials universe, providing us the opportunity to explore hundreds of millions of options. This could enhance energy efficiency in electric vehicles, increase the power output of wind turbines, and make supply chains less dependent on a single country.”
Why the Focus on Magnets?
Permanent magnets are essential components in technologies such as electric vehicle motors, wind turbines, robotics, and defense systems. Most high-performance ones are sourced from China. Recent export controls have turned this issue into a geopolitical risk, prompting automakers and defense providers in the U.S. and Europe to seek alternatives, although options remain limited.
Dr. Nguyen emphasized the urgency of finding replacements for rare-earth magnets, stating, “We begin with rare-earth-free magnets, a material urgently needed for decades but difficult to replace. However, our approach extends beyond just one type of material.”
Alqem’s Unique Discovery Process
Launched in 2026, Alqem was established by Nguyen, who has a background with McKinsey, Unilever, and OCI Global, along with Dr. Tiago Cerqueira and Prof. Milan Allan from LMU Munich. Cerqueira previously co-developed Alexandria, which is recognized as one of the largest open databases of materials.
Alqem is focusing on predicting which crystalline compounds are worth developing, testing the most promising candidates in their laboratories. Their tools include al-mine, a database that filters out rare-earth and toxic materials, and al-oracle, a collection of material-property datasets cultivated over several years.
While Alqem has developed a list of potential rare-earth-free magnets validated through laboratory data, they’ve yet to disclose specifics on the candidates.
Claudia Felser, from the Max Planck Institute for Chemical Physics of Solids, remarked on Alqem’s innovative approach, highlighting the importance of combining computational predictions with experimental testing.
The Competitive Landscape
Alqem faces stiff competition from well-funded rivals like Lila Sciences, which has secured $550 million for its AI-driven science platform and boasts a valuation exceeding $1.3 billion. Other players include Periodic Labs and CuspAI, both pursuing similar material discovery goals.
Despite securing a modest €8 million compared to the substantial investments in other AI materials start-ups, Alqem’s scientific foundation and targeted approach enhance its credibility.
The AI materials-discovery sector is projected to grow significantly, with a market value estimated to increase from $536 million in 2024 to $5.6 billion by 2034. This growth has attracted not only venture capital but also government funding, indicating its significance to national industrial policy.
Backing Alqem’s Vision
Investors see promise in Alqem’s potential. Amanda Birkenholz from UVC Partners noted, “Alqem is positioned to address one of Europe’s key industrial challenges. The company combines advanced materials science with entrepreneurial spirit, potentially paving the way for leadership in this critical area.”
The startup plans to use its funding to expand its teams in Munich and Coimbra and establish research partnerships with several universities.
As Alqem works towards its goal, the real test will be whether it can accelerate the discovery process and deliver viable products before its better-funded competitors do. The future of Europe’s magnet supply chain may hinge on Alqem’s progress.
