North East manufacturer Advanced Electric Machines has raised £16m in combined equity and debt to expand production of magnet-free electric motors, drawing in Barclays Climate Ventures alongside an Innovate UK loan.
Advanced Electric Machines (AEM), a Newcastle University spinout based in Washington, Tyne and Wear, has raised £16m in a mix of equity and loan financing to scale manufacturing of electric motors that use no rare-earth materials.
The equity portion drew backing from Barclays Climate Ventures, PXN Ventures, Northstar Ventures and the Low Carbon Innovation Fund, with a loan provided by Innovate UK. The company did not disclose the split between equity and debt, nor a post-money valuation.
AEM designs and builds electric motors that replace permanent magnets, which typically rely on imported rare-earth elements, with what it describes as sustainable, lower-cost alternatives. Its technology targets commercial vehicles, passenger cars, motorcycles and maritime applications.
The pitch lands at a moment of heightened concern over supply-chain exposure to rare-earth materials, the bulk of which are processed in China. Motor makers able to remove that dependency have become a strategic interest for both investors and vehicle manufacturers.
"OEMs are increasingly looking for motor technologies that can deliver performance, cost competitiveness and manufacturing scalability without dependence on rare earth materials," said chief executive Dr James Widmer.
The capital will fund an expansion of manufacturing capacity at the company's production plant, development of a higher-torque heavy-duty commercial vehicle platform, and the roll-out of its motor technology for passenger vehicles.
The cap table reflects a distinctly climate- and region-focused set of backers. Barclays Climate Ventures anchors the round with corporate-linked capital, while Northstar Ventures and the Low Carbon Innovation Fund bring regional and clean-technology mandates. The Innovate UK loan adds non-dilutive public financing, a structure that lets a capital-intensive manufacturer scale production without ceding as much equity as a pure venture round would require.
For the North East, the deal is a notable vote of confidence in a hardware-heavy deep-tech business at a point when much UK venture funding continues to flow towards software and AI. Scaling physical motor production demands sustained investment in plant and equipment, and the blended equity-and-debt structure signals investors are willing to underwrite that build-out.
AEM did not disclose revenue figures, order commitments from vehicle manufacturers, or headcount targets attached to the expansion. The company also did not name a lead investor for the equity tranche.
Original source: UKTN — https://www.uktech.news/deep-tech/newcastle-spinout-advanced-electric-machines-secures-16m-20260805
