Battery Energy Storage Companies Received $536 Million in VC Funding in 1H of 2020
Battery storage, smart grid, and energy efficiency companies raised $858 million in VC funding
Global VC funding (venture capital, private equity, and corporate venture capital) for battery storage, smart grid, and efficiency companies in the first half (1H) of 2020 was down by 51% with $858 million raised compared to $1.8 billion during the same period in 2019, according to a newly released report from Mercom Capital Group.
On the other hand, the total corporate funding (including venture capital funding, public market, and debt financing) declined by 38% to $1.5 billion, compared to $2.4 billion in 1H 2019.
VC funding for battery storage companies in 1H 2020 was down by 61%, with $536 million in 14 deals compared to $1.4 billion raised in 17 deals in 1H 2019. The amount was higher last year, primarily due to Northvolt’s $1 billion funding round in Q2 2019.
The top five notable VC funding deals in 1H 2020 were: QuantumScape raising $200 million, ProLogium Technology raising $100 million, Demand Power Group’s $71 million deal, Highview Power securing $46 million, and Nanotech Energy raising $28 million.
A total of 26 VC investors participated in battery storage funding in 1H 2020, according to the report.
Announced debt and public market financing activity in the first half of 2020 ($180 million in five deals) was 67% lower compared to the first half of 2019 when $547 million was raised in five deals.
There were eight (all undisclosed) battery storage M&A transactions in 1H 2020, while there were only six (one disclosed) in the same period last year.
VC funding into smart grid companies was 79% higher with $275 million compared to $154 million raised in 1H 2019.
The top five VC funding deals in 1H 2020 were: SmartRent raising $60 million, SmartWires securing $43 million, FreeWire Technologies’ $25 million deal, Urbint raising $20 million, and Urjanet receiving $15 million. A total of 44 VC investors participated in smart grid funding in 1H 2020.
The announced debt and public market financing for smart grid companies came to $10 million through three deals in 1H 2020, while it was $1 million raised in one deal in 1H 2019.
In 1H 2020, there were a total of six smart grid M&A transactions (all undisclosed), compared to 18 transactions (one disclosed) in the same period in 2019.
VC funding for energy efficiency companies in 1H 2020 was 77% lower, standing at $47 million compared to $207 million raised in 1H 2019.
The top five VC funding deals in 1H 2020 were: Juganu raising $18 million, BrainBox AI securing $12 million, SmartAC.com receiving $10 million, Rebound Technologies’ $5 million deal, and HyperBorean’s $2 million funding deal. A total of 17 VC investors participated in energy efficiency funding in 1H 2020.
Announced debt and public market financing activity in the first half of 2020 ($500 million in one deal) was 793% higher compared to last year when $56 million was secured into two deals.
In 1H 2020, there was one disclosed efficiency M&A transaction, compared to eight transactions (two disclosed) in 1H 2019.
According to Mercom Capital’s previous report, battery storage, smart grid, and energy efficiency companies received $252 million in venture capital funding in Q1 2020, a 20% increase from the $210 million raised in Q1 2019.
Battery storage systems are emerging as a potential solution for integrating solar and wind renewables in power systems across the globe. The International Renewable Energy Agency (IRENA) recently published a report showing how electricity storage technologies can be used for several applications in the power sector, ranging from e-mobility and behind-the-meter (BTM) applications to utility-scale. According to the study, utility-scale batteries can enable a greater feed-in of renewables into the grid by firming renewable energy output.
Notably, India is working toward a National Energy Storage Mission to set targets and policy direction going forward. As energy storage projects are almost negligible in India, efforts have been made to tender and auction solar and wind projects along with battery energy storage in the country.