The magnets inside your electric vehicle, wind turbine, or smartphone almost certainly came from China. More precisely: they probably contain rare-earth elements that China refines, controls, and—when geopolitical winds shift—restricts.
That dependency has made alqem's pitch to investors surprisingly compelling. The Munich-based startup, which announced an €8 million funding round on July 6, is betting that artificial intelligence can identify alternatives to rare-earth permanent magnets before the next supply shock hits. UVC Partners and Union Square Ventures co-led the round, which some are calling pre-seed and others seed—a labeling dispute that matters less than the size of the check, particularly for a company founded just months earlier in February.
No valuation was disclosed, though the funding ranks among Europe's more substantial early bets on AI-driven materials discovery. Perhaps more telling: it lands at a moment when Western policymakers are increasingly anxious about what happens when a single country dominates the building blocks of the energy transition.
The Numbers Behind the Worry
China produced roughly 94% of the world's sintered permanent magnets in 2024, according to the International Energy Agency. It also controls about 60% of global mine supply for the rare-earth elements that make those magnets work—neodymium, praseodymium, dysprosium. Demand has doubled since 2015. Current policy trajectories suggest another 33% jump by 2030.
Then came the export controls. In 2023 and 2024, Beijing imposed restrictions on gallium, germanium, graphite, and rare-earth magnet manufacturing technology—a pointed reminder that supply chains built on geopolitical goodwill can be redrawn with a regulatory stroke. Industries reliant on high-performance magnets—electric vehicles, wind energy, robotics, defense contractors—are paying attention.
It's a familiar playbook, really. Identify a bottleneck. Corner the market. Wait.
Computational Chemistry Meets Real-World Labs
alqem's approach hinges on marrying vast computational prediction with physical experimentation, a marriage that hasn't always worked smoothly in materials science. The company maintains what it calls "al-mine," a proprietary database deliberately skewed away from rare-earth, toxic, or expensive elements. Another tool, "al-oracle," provides domain-specific training data for material properties. The intent: generate magnet candidates that can actually be synthesized, not just simulated.
The startup says it has a pipeline of rare-earth-free magnet candidates validated against experimental data, though it hasn't specified how many or how close they are to commercial viability. That gap between "validated" and "market-ready" has claimed other materials startups before.
To hedge the science risk, alqem has assembled collaborations with some heavyweight research institutions: the Max Planck Institute for Chemical Physics of Solids in Dresden (under Prof. Claudia Felser), LMU Munich, TU Munich, Técnico Lisboa, University of Porto, and University of Coimbra. The company also operates a lab in Coimbra, Portugal, alongside its Munich headquarters.
Credentials From the Alexandria Database
The founding team's technical pedigree traces back to the Alexandria project, an open materials database developed at ICAMS at Ruhr University Bochum. Alexandria contains over 5 million density-functional theory calculations for periodic compounds—a reference library that computational chemists lean on when hunting for new materials.
Dr. Tiago Cerqueira, alqem's CTO, co-developed Alexandria and co-authored papers on it through early 2026. Prof. Miguel Marques of Ruhr University Bochum, another Alexandria architect, advises the company. CEO Hanh Nguyen brings a different skill set: stints at McKinsey, Unilever, and OCI Global, the sort of operational background that investors hope can translate computational breakthroughs into actual products. Prof. Milan Allan, the chief scientific officer, chairs LMU Munich's Experimental Physics group focused on quantum metrology and sensing.
The company formally registered in Germany in mid-February 2026, making this funding round remarkably swift—or, depending on your perspective, a reflection of how urgent the rare-earth question has become.
A Small but Growing Field
alqem enters a niche that's starting to attract serious capital and attention. Materials Nexus, a UK-based competitor, announced an AI-discovered rare-earth-free permanent magnet in June 2024. Niron Magnetics in the U.S. is commercializing iron nitride magnets with government backing. Market forecasts—always a bit speculative at this stage—suggest the permanent magnets market could grow from around $28 billion in 2026 to $47.4 billion by 2033, according to Grand View Research, though such projections hinge on assumptions about EV adoption and renewable energy deployment that may or may not pan out.
The €8 million will go toward scaling alqem's discovery engine and advancing magnet candidates closer to commercial production. The company plans to build teams across both its Munich and Coimbra locations, embedding itself in the UnternehmerTUM ecosystem, Munich's well-established startup incubator network.
Whether alqem can turn computational predictions into magnets that work in real motors, at scale, remains the open question. The science is promising. The geopolitical tailwinds are undeniable. But materials discovery has humbled plenty of well-funded ventures before—often right around the moment when laboratory success meets manufacturing reality.
For now, the startup has bought itself runway to find out.
