Battery Storage, Smart Grid, Energy Efficiency Companies Raised US$ 2.8 Bn in 2018

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In 2018, smart grid companies received US$ 530 million in venture capital funding in 29 deals, witnessing an increase of 26 per cent compared to a year ago

Battery storage, smart grid and energy efficiency companies raised around US$ 2.8 billion in 2018, recording an increase of 46 per cent as compared to US$ 1.5 billion raised in 2017, according to the latest report by Mercom Capital Group – a global clean energy communications and consulting firm.

VC funding in battery storage segment

In 2018, venture capital (VC) funding into battery storage companies was up by 19 per cent to US$ 850 million raised from 49 deals as compared to US$ 714 million raised in 30 deals in the previous year, as per the report.

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Overall corporate funding, including debt and public market financing, grew to US$ 1.3 billion last year as compared to US$ 890 million in 2017.

The companies in lithium-ion based battery technology raised the maximum funds at US$ 236 million in 2018, followed by energy storage systems companies with US$ 193 million.

In 2018, the major companies were QuantumScape receiving US$ 100 million VC fund, followed by Stem receiving US$80 million, Sonnen with US$ 71 million, Sila Nanotechnologies brought in US$ 70 million and Ionic Materials raised US$ 65 million.

Lat year, 73 VC investors took part in battery storage deals as compared to 86 in 2017.

Announced debt and public market funding for battery storage companies increased to US$ 490 million in 11 deals from US$ 177 million in 12 deals, a year ago.

There were 16 merger and acquisitions (M&A) transactions in battery storage, out of which there are only three disclosed transaction amounts. However, in 2017, there were only three M&A transactions, of which two were disclosed transaction amounts, as per the report.

Smart grid companies funding

In 2018, smart grid companies received US$ 530 million in VC funding in 29 deals, witnessing an increase of 26 per cent compared to US$ 422 million from 45 deals in 2017.

Overall corporate funding, including debt as well as public market financing, came to US$ 1.8 billion in 33 deals, compared to US$ 1.2 billion in 50 deals in 2017, the report stated.

Last year, the top VC funded companies were ChargePoint with US$ 240 million, followed by Smart Wires with US$ 55 million, Volta Charging with US$ 35 million, AutoGrid which received US$ 32 million and Ample raised US$ 31 million.

In 2018, 69 investors funded smart grid companies, whereas 88 investors funded the smart grid companies in 2017. The major VC investors were Energy Impact Partners, WindSail Capital Group, E. ON, Shell Ventures and Orstead.

The largest share of VC funding was received by smart charging of plug-in hybrid electric vehicle (PHEV) and vehicle-to-grid (V2G) companies, with US$ 348 million raised in nine deals, followed by US$ 59 million received by grid optimisation companies in two deals.

Last year, four debt and public market financing deals totaling US$ 1.3 billion were announced, compared to $774 million in five deals in 2017, increase of 67 per cent.

There were 12 undisclosed M&A transactions in the smart grid sector compared to 27 transactions (seven disclosed) for US$ 2.5 billion in 2017.

Funding in energy efficiency

The VC funding in energy efficiency companies recorded massive surge in 2018, with US$ 1.5 billion in 23 deals as compared to $384 million in 38 deals in 2017. On the other hand, overall corporate funding, including debt and public market financing, reached over US$ 1.7 billion in 2018, compared to US$ 3.3 billion, a year ago.

The top companies in energy efficiency receiving VC funding in 2018 were View with US$ 1.1 billion, UrbanVolt raised US$ 64 million, ecobee with US$ 61 million and US$ 36 million in two deals and tado° raised US$ 50 million.

The debt and public market financing announced by energy efficiency companies in 2018 declined to US$ 277 million in three deals last year from US$ 2.9 billion in 16 deals in 2017.

In 2018, M&A activity for efficiency companies fell to seven transactions, one of which disclosed the transaction amount, whereas there were 10 M&A transactions in 2017, with three disclosed transactions.

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