Venture Capital Funding for Battery Energy Storage Companies Rises by 103% in 2019

Battery storage, smart grid, and efficiency companies scored 18% lower in VC funding in 2019


In 2019, global VC funding (venture capital, private equity, and corporate venture capital) for battery storage, smart grid, and efficiency companies totaled $2.3 billion compared to $2.8 billion raised in 2018.

These numbers were revealed in the newly released annual and Q4 funding and M&A report by Mercom Capital Group.

The total corporate funding (including venture capital funding, public market, and debt financing) shrunk by 22%, with $3.8 billion raised during the year when compared to $4.9 billion in 2018.

Battery Storage, Smart Grid, and Efficiency VC Funding 2018-2019

Battery Storage

VC funding into battery storage companies in 2019 was up by 103%, with $1.7 billion raised in 32 deals compared to $850 million raised in 49 deals in 2018.

This increase was primarily due to Northvolt’s $1 billion deal in Q2 2019. Total corporate funding, including debt and public market financing, increased to $2.8 billion in 2019 compared to $1.3 billion in 2018.

The top VC funded companies in 2019 were: Northvolt with $1 billion, Sila Nanotechnologies with $170 million and $45 million in two separate deals, Energy Vault with $110 million, and Romeo Power with $89 million.

Two Indian battery storage companies, Log 9 Materials and LivGuard Energy Technologies, received VC funding in 2019.

A total of 78 VC investors participated in battery storage deals in 2019. Utilities and oil and gas companies were involved in seven battery storage funding deals in 2019.

Announced debt and public market financing in 2019 increased to $1.1 billion in 10 deals compared to $494 million in 12 deals in 2018. Northvolt’s $393 million loan was the largest debt financing deal in 2019.

There were 10 M&A (merger and acquisition) transactions in the battery storage category in 2019, of which only two disclosed the transaction amounts. In 2018, there were 16 M&A transactions, three of which disclosed the details.

According to a forecast from BloombergNEF (BNEF), energy storage installations around the world will multiply exponentially, from a modest 9 GW/17 GWh deployed as of 2018 to 1,095 GW/2,850 GWh by 2040. Just ten countries are on course to represent almost three-quarters of the global market in gigawatt terms. South Korea is the lead market in 2019, but will soon cede that position, with China and the U.S. far in front by 2040. The remaining significant markets include India, Germany, Latin America, Southeast Asia, France, Australia, and the U.K.

Global Cumulative Energy Storage Installations

Also, one Indian company, Greenko, received a funding of $495 million for energy storage projects in 2019.

Smart Grid

VC funding in smart grid companies in 2019 was 43% lower, with $300 million raised in 38 deals compared to the $530 million raised in 29 deals in 2018. Total corporate funding was $372 million in 41 deals, compared to $1.8 billion in 33 deals in 2018.

The top VC funded companies in 2019 were Smart Wires, which brought in $75 million, eSmart Systems, which received $34 million, SmartRent, which secured $32 million, CleanSpark with $20 million, and Volta Charging with $20 million.

There was one Indian smart grid company, Husk Power Systems, that received VC funding in 2019.

Announced debt and public market financing came to $72 million in three deals compared to $1.3 billion in four deals in 2018. There were no IPOs announced for smart grid companies in 2019.

In 2019, there were 29 M&A transactions (one disclosed) recorded in the smart grid sector. In 2018, there were 12 undisclosed transactions.

Energy Efficiency

VC funding for energy efficiency companies fell sharply with $298 million in nine deals in 2019 compared to $1.5 billion in 23 deals in 2018. This was an 80% decrease primarily due to the $1.1 billion deal raised by architectural dynamic glass developer, View, in Q4 2018. Total corporate funding reached more than $670 million in 2019 compared to $1.7 billion in 2018.

The top VC funded companies in 2019 were: Kinestral Technologies, which raised $100 million, followed by Budderfly with $55 million, CIMCON Lighting with $33 million, Carbon Lighthouse with $33 million, and Arcadia Power with $30 million.

Announced debt and public market financing activity in 2019 rose to $371 million in three deals compared to $277 million raised in the same number of deals in 2018.

In 2019, there were a total of nine M&A transactions (two disclosed compared to seven transactions (one disclosed) in 2018.

Battery Storage, Smart Grid, and Efficiency Top Disclosed M&A Transactions in 2019

The world is gradually shifting its energy consumption patterns through sustainable and energy-efficient technologies.

Recently, the Indian Institute of Science Education and Research and SPEL Technologies Pune jointly developed a technology for generating functionalized graphene at lower costs. This process will be used for the development of graphene-based supercapacitors for energy storage.

Also, a new research finding at IBM Research could help eliminate the use of heavy metals in battery production. Generally, heavy metals like nickel and cobalt are used in batteries, which pose a serious threat to our environment and are hazardous. The research team at IBM Research has come up with a new battery that does not use any heavy metals with sourcing concerns.

In December 2019, the Energy and Resources Institute invited bids for battery energy storage systems on turnkey basis under the U.S.-India Collaborative for Smart Distribution System with Storage initiative with the BSES Rajdhani Power Limited in the national capital territory of Delhi.


Image credit: Invenergy