Critical Materials Manufacturing

America’s next era of industrial leadership may not be defined solely by software, AI models, or even finished hardware- it will be defined upstream, at the level of materials. From batteries and semiconductors to grid infrastructure and defense systems, the United States’ ability to manufacture at scale increasingly hinges on access to critical materials produced with the right purity, consistency, and volume.

For strategic tech investors, this is emerging as a distinct and underappreciated opportunity: critical materials manufacturing as venture-scale infrastructure.

Why Critical Materials Matter Now

Critical materials are those that are both essential to modern energy and industrial technologies and exposed to significant supply-chain risk. Today, many of the materials most important to electrification, advanced manufacturing, and national security (graphite, silicon, gallium, cobalt, dysprosium, iridium, etc) are produced or refined predominantly outside the United States.

This creates a structural vulnerability. As demand accelerates across EVs, grid storage, AI compute, and defense applications, downstream manufacturers increasingly need domestic suppliers who can meet exacting technical specifications and deliver at scale.

The DOE published a medium term critical materials graph to study importance to energy V supply risk in 2020, highlighting the materials that are critical to industry.

A New Venture Pattern: Process Innovation, Not Discovery

What’s notable about this wave of companies is that they are not reinventing chemistry from scratch. Instead, the most compelling startups are:

• Taking known industrial processes (smelting, pyrolysis, chemical vapor deposition, purification)
• Applying modern control, materials science, and process engineering
• Pushing them to a new performance frontier

These companies are not selling pilot-scale novelty—they are building industrial systems designed to plug directly into existing materials value chains.

The Commercial North Star: Selling Up the Chain

The goal is not consumer adoption or even direct OEM relationships. The most successful critical materials startups often are designed to sell up the chain to:

• Battery cell and cathode manufacturers
• Polysilicon and wafer producers
• Advanced materials suppliers
• Defense and aerospace primes

When achieved, this creates highly durable demand. Once a material is qualified into a manufacturing process, switching costs are high and contracts tend to be long-term.

Where Startups Should Be Building

The Department of Energy’s critical materials assessments provide a roadmap for founders. Particularly attractive areas sit at the intersection of:

• High supply-chain risk
• High importance to energy and industrial systems
• Rapidly growing downstream demand

Materials such as natural graphite, silicon, silicon carbide, gallium, cobalt, dysprosium, and rare earth elements consistently surface as both critical and near-critical across short- and medium-term horizons.

Opportunity is especially strong in:

• Domestic refining and purification of materials historically mined or processed abroad.
• Process intensification that lowers cost, energy use, or emissions.
• Modular, scalable production systems that can be deployed incrementally.

Why This Is a Strategic Tech Investment Theme

This category sits squarely at the intersection of venture capital, industrial policy, and national resilience.

For investors, critical materials manufacturing offers:

• Exposure to trillion-dollar end markets (energy, semiconductors, defense)
• Strong policy tailwinds and non-dilutive funding pathways
• Deep technical moats rooted in process know-how
• Customers with urgent, long-term demand

For the U.S., it represents a pathway to rebuild industrial capability without attempting to recreate 20th-century manufacturing models wholesale.

The Bottom Line

The next generation of strategic tech companies won’t just build better products—they’ll build the materials foundations those products depend on.

Critical materials manufacturing is emerging as a new venture category defined by process excellence, industrial scale, and national importance. As demand accelerates and supply chains tighten, the companies that can reliably produce the right materials, at the right quality, in the right geographies are positioned to become indispensable.

At Alumni Ventures, we believe this is one of the most important frontiers in U.S. strategic technology investing—and one where early, technically informed capital can have outsized impact.

Our Portfolio in Action

This thesis is already taking shape across the Alumni Ventures portfolio. One example is Radical AI, a materials intelligence company building an AI-native platform to design, test, and validate next-generation materials at unprecedented speed and scale. Radical combines large-scale simulation with a self-driving lab, enabling rapid discovery of high-performance alloys and materials critical to aerospace, defense, energy, and advanced manufacturing. Rather than selling software alone, Radical’s model is designed to translate discovery into real-world materials that can be qualified and sold up the industrial supply chain—exactly the kind of platform needed to unlock domestic production of critical materials. In 2024, the company signed a memorandum of understanding with the U.S. Department of Energy, underscoring the strategic importance of its platform to national critical materials priorities—specifically the need to move beyond lab-scale innovation toward domestically produced, qualification-ready materials that can scale into real manufacturing supply chains.

At Alumni Ventures, we believe this is one of the most important frontiers in U.S. strategic technology investing—and one where early, technically informed capital can have outsized impact.

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Not an offer to sell securities, example portcos illustrative only, not indicative of AV fund/investor outcomes, not available to future investors. VC investing involves substantial risk. including risk of loss of all capital invested. Not investment advice. Add forward-looking statements disclosure.

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