Munich and Coimbra-based deeptech startup alqem has secured €8 million in pre-seed funding, co-led by UVC Partners and Union Square Ventures, to develop rare-earth-free permanent magnets. Founded in 2026 by CEO Dr. Hanh Nguyen, CTO Dr. Tiago Cerqueira, and CSO Prof. Milan Allan, the company emerged from the team behind Alexandria, a major open materials database. China currently controls 94% of the global permanent magnet market, and no significant breakthrough in magnet chemistry has occurred in over 40 years. alqem will use the funding to expand teams and establish university research partnerships.
In-Depth:
- alqem, a deeptech startup with offices in Munich and Coimbra, has raised €8 million in pre-seed funding. The round was co-led by UVC Partners and Union Square Ventures.
- alqem was started by the team behind Alexandria, an open materials database. The company is working on rare-earth-free magnets, an area where China currently controls about 94% of the market, according to the IEA.
- There has not been a major breakthrough in permanent magnet chemistest for more than 40 years. Alqem is competing with much better-funded companies like Lila Sciences, which has raised $550 million for a larger AI-for-science platform.
China builds 94% of the world’s permanent magnets. The last large discovery in magnet chemistest happened more than 40 years ago.
alqem, started by the team behind one of the largest open materials databases, wants to tackle both of these problems. The company has raised €8 million in pre-seed funding, with UVC Partners and Union Square Ventures leading the round.
“For the first time, we have a map of the materials universe. Not just a few known compounds, but hundreds of millions of possibilities we can now systematically explore and bring to the world. Materials that will build electric vehicles more energy efficient, wind turbines more powerful, and critical supply chains indepfinishent from single-countest control,” states Dr Hanh Nguyen, co-founder and CEO of alqem.
Why magnets and why now?
Permanent magnets are key parts of electric vehicle motors, wind turbines, robotics, and defence systems. Most high-performance magnets come from China. Recent export controls have built this not just a business issue, but a geopolitical risk.
As a result, autobuildrs and defence suppliers in the US and Europe are viewing for alternatives, but these are hard to find. So far, only a tiny number of the possible crystalline compounds have actually been built.
“We start where the required is greatest, rare-earth-free magnets, a material the world urgently requireds and hasn’t been able to replace for decades. But the engine we are building is not limited to one material class,” adds Dr Nguyen.
How alqem’s discovery engine works
alqem was founded in 2026 by Nguyen, who previously worked at McKinsey, Unilever, and OCI Global, along with Dr. Tiago Cerqueira, chief technology officer, and Prof. Milan Allan, chief scientific officer and chair of experimental physics at LMU Munich.
Cerqueira co-developed Alexandria, an open database of predicted materials, with scientific advisor Prof. Miguel Marques at Ruhr University Bochum. A peer-reviewed paper in the Journal of Physics: Materials describes Alexandria as one of the largest open collections of density-functional-theory calculations and the largest open database of thermodynamically stable materials, supporting the founders’ expertise.
The startup predicts which of the hundreds of millions of possible crystalline compounds are worth building, and then tests the most promising ones in its own lab. Its tools include al-mine, a database of predicted stable compounds that excludes rare-earth, toxic, and expensive elements, and al-oracle, a set of material-property training datasets built over several years.
alqem states it has developed a pipeline of rare-earth-free magnet candidates that have been validated with lab data, but it has not shared how many or which alloys.
“Discovering a genuinely new permanent magnet is one of the hardest problems in materials science. The last real breakthrough came more than forty years ago. What builds Alqem’s approach different is that it doesn’t stop at prediction. In our collaboration, we are putting exactly the kind of rare-earth-free candidates the field has been waiting for to the experimental test, and it is the pairing of large-scale computational screening with rigorous synthesis that convinces me this can work,” states Claudia Felser, director of the Max Planck Institute for Chemical Physics of Solids and vice president of the Max Planck Society.
Competition in AI materials-discovery
Its competitors have much more funding. Lila Sciences, for example, has raised $550 million for its broad “AI Science Factory” platform and was valued at over $1.3 billion in October 2025.
Other companies, like Periodic Labs, founded by former OpenAI and Google DeepMind researchers, and UK-based CuspAI, are working toward similar goals. Paris-based Altrove, which focutilizes on substitutes for other important materials, recently raised $10 million.
Tech Funding News has also reported on Monumo’s rare-earth-free EV motor design and Lithosquare’s AI-driven search for critical minerals, both of which address related supply chain issues.
Since 2025, AI materials-discovery startups have raised over $1.2 billion in venture funding, according to PitchBook. In this landscape, alqem’s €8 million is tiny, but its focutilized approach and strong scientific background give it credibility beyond that of pure software companies.
The AI-driven materials discovery market was worth about $536 million in 2024 and could grow to $5.6 billion by 2034, according to Market.us. Government funding is now joining venture capital. For example, the U.S. Department of Energy’s Genesis Mission, announced in March 2026, is providing supercomputing and AI resources for materials discovery. This displays that Western governments now see the sector as important for industrial policy, not just business.
Investors with a track record in data
“At USV, we have a thesis around AI learning loops for the real world that create proprietary datasets. The alqem.ai team is leveraging their experience with building one of the largest open data sets to now explore innovative materials, starting with magnets. We
“alqem is a startup with world-class science translated into a company tackling one of Europe’s most strategic industrial challenges. Advanced materials sit at the heart of the technologies that will define the next decades, from clean energy to mobility to defense. alqem has the unique scientific foundation with the entrepreneurial drive to build a category leader in this field,” adds Amanda Birkenholz, Principal, UVC Partners.
The startup plans to utilize the funding to grow its teams in Munich and Coimbra and to set up research partnerships with LMU Munich, TU Munich, Técnico Lisbon, and the universities of Porto and Coimbra.
alqem’s real challenge is not just finding promising rare-earth-free compounds on paper, since several competitors can already do that. The main question is whether al-mine and al-oracle can speed up a discovery process that has seen little progress in forty years and deliver results to the factory before better-funded rivals like Lila Sciences, Periodic Labs, or CuspAI.
Europe’s chance to rebuild its own magnet supply chain may depfinish on how quickly this Alexandria spin-out can relocate forward.
