Washington based Advanced Electric Machines raises £16m led by Barclays Climate Ventures
This article covers Advanced Electric Machines, an energy startup, which has closed a growth funding round of £16m to scale production and accelerate development of rare-earth-free electric motors at its Teal Farm Way facility in Washington, Tyne and Wear. The funding aims to help the startup expand product and manufacturing capacity, support vehicle and industrial manufacturers seeking alternatives to rare-earth-dependent motors, and create more than 20 skilled roles in the North East.
Advanced Electric Machines (AEM), a Washington-based energy startup spun out of Newcastle University, has closed a growth funding round of £16m to scale production and speed development of rare-earth-free electric motors at its Teal Farm Way facility in Washington, Tyne and Wear. The capital will fund product expansion, capacity increases and what the company expects will be more than 20 new skilled roles.
Why it matters
The raise matters because it backs a manufacturing solution to a growing supply-chain problem: dependence on rare earth materials and permanent magnets. AEM’s approach seeks to replace those inputs and use more readily available materials such as aluminium, which could reduce cost exposure, improve recyclability and ease sourcing pressures for vehicle and industrial manufacturers. The deal also illustrates continued interest from energy investors in alternatives to magnet-dependent motor designs.
Inside the product
AEM manufactures electric motors that avoid permanent magnets and rare earths, replacing copper windings with aluminium in some designs. The firm says this enables competitive performance and efficiency while lowering weight and improving recyclability. Its technology is currently applied across a broad set of sectors, including passenger cars, motorcycles, all-terrain vehicles, trucks, buses, construction machinery and the marine industry.
The new funding will accelerate development of AEM’s next-generation high-torque motor platform and expand its HDRM commercial vehicle portfolio. The company also referenced SSRD technology for passenger vehicle applications that it says is progressing through OEM development programmes.
Who are the investors?
The £16m round was led by existing shareholders Barclays Climate Ventures, PXN Ventures, Northstar Ventures and the Low Carbon Innovation Fund, with additional participation from unnamed new investors. The round is complemented by loan support from Innovate UK to finance expansion of AEM’s facilities, production capacity and engineering capabilities at its Washington site.
The investors cited the North East’s engineering heritage and the potential for AEM’s technology to support electrification without reliance on overseas rare-earth supply chains.
In the announcement, Greg Debicki, director principal Investments at Barclays Climate Ventures, said:
We are delighted to support AEM, a leading UK manufacturer based in the North East, whose growth highlights the important role UK technological innovation can play in supporting the global transition to electrification. Developed at Newcastle University, their innovative motor platform has the potential to support businesses around the world, while reinforcing the UK's reputation for advanced engineering. This investment will help accelerate AEM's growth and we are glad to support the expansion of this regional champion.
In the announcement, Andrew Noble, chief operating officer at PXN Group, said:
AEM is tackling one of the hardest and most important problems in the electrification of transport: how to build motors that perform better, cost less and don't rely on rare earth supply chains outside of the UK and Europe. James [Widmer, AEM CEO] and the team have demonstrated the engineering depth to turn that vision into a serious industrial business, and this round is a real vote of confidence in the progress they've made. We're thrilled to continue our support.
In the announcement, Alex Buchan, investment director at Northstar Ventures, said:
The North East has a long-held reputation for producing landmark technological innovations capable of operating in the global arena. Ensuring companies at this stage have access to the capital required to scale is vital.
If you're researching potential backers in this space:
- Explore our list of energy venture capital firms in the UK
- Browse our directory of energy angel investors in the UK
Founder perspective
AEM was founded in March 2017 by Dr James Widmer and Dr Andy Steve from Newcastle University’s Centre for Advanced Electrical Drives, which helped commercialise new motor technologies and attracted more than £25m of early investment. The company now employs over 60 people at its Washington site and expects to add several engineering roles immediately, with potential to create more than 20 positions across engineering, manufacturing and supply chain as products move into production.
In the announcement, Dr Widmer, CEO at Advanced Electric Machines, said:
OEMs (original equipment manufacturers) are increasingly looking for motor technologies that can deliver performance, cost competitiveness and manufacturing scalability without dependence on rare earth materials and magnets. Our technology has already demonstrated that this is possible in production environments.
This funding enables us to accelerate development of our next generation of products and expand our offering into higher-power and higher-torque applications.
We are building on a platform that is already proven in production and the field and designed to help customers strengthen supply-chain resilience while meeting increasingly demanding performance requirements.
The bigger picture
AEM’s raise highlights two converging trends in the UK and European energy and transport sectors: a push to secure more domestically resilient supply chains for electrification hardware, and continued investor appetite for hardware firms that can demonstrate manufacturable alternatives to magnet-based motors. The company’s university roots and regional manufacturing footprint also feed broader policy aims around industrial innovation and high-skilled job creation in the North East.
As Europe seeks to lower reliance on constrained raw materials and scale electric vehicle and industrial electrification, funding rounds like this will be watched for signs that hardware-focused startups can move from pilot projects to volume production while attracting follow-on capital.
They've invested in Advanced Electric Machines
Get to know these energy investors
| Investors | Investment Focus | Startup Investments | Round Size | Connect |
|---|---|---|---|---|
 | ||||
 PXN Ventures( ) PXN Ventures is a UK-based venture capital firm focused on backing high-growth c... Manchester  | ||||
 Northstar Ventures( ) Northstar Ventures invests in early and later stage, high growth companies focus... Newcastle | ||||
 Low Carbon Innovation Fund( ) | ||||
 | ||||
| All investors | All investor sectors | All funded startups | All funding rounds |
Click here for a full list of 7,589+ startup investors in the UK