Oct 23 (Reuters) - Battery recycling firm Redwood

Materials said on Thursday it has closed a $350 million funding

round led by venture capital firm Eclipse Ventures, with

participation from new investors including Nvidia's ( NVDA )

investment arm, NVentures.

The fundraise for Redwood comes at a time when boosting

domestic supply of critical materials has become a priority for

several countries around the world, while growing use of

artificial intelligence technologies have resulted in massive

energy demand.

Nevada-based Redwood operates in both those areas - it

recovers critical elements including lithium, cobalt, nickel,

and copper by recycling batteries, and deploys energy storage

systems that provide grid services and power data centers.

"This is a pivotal time for both Redwood and the United

States, as curtailment in international supplies overlaps with

intense domestic demand growth for these same materials and

energy products," the company said in a statement.

Founded in 2017, Redwood is led by chief executive J.B.

Straubel, a co-founder and director of Elon Musk's Tesla

. Straubel was also chief technology officer at Tesla

until 2019, when he left the EV maker to scale Redwood.

The firm has struck partnerships with companies across the

automotive, battery manufacturing and tech industries, including

Volkswagen, Panasonic ( PCRFF ), Toyota ( TM ) and

Lyft ( LYFT ).

Redwood, which was valued at $5 billion after an August 2023

fundraise of $1 billion, said it would use the new capital to

boost expansion of its energy storage operations, its materials

production capacity and its employee base.

(Reporting by Deborah Sophia in Bengaluru and Ernest Scheyder;

Editing by Saumyadeb Chakrabarty)