Mercom Capital Group recently released its report on funding and mergers and acquisitions (M&A) activity for the battery storage, smart grid, and energy efficiency sectors for 2019.
Global VC funding (venture capital, private equity, and corporate venture capital) for battery storage, smart grid, and energy efficiency companies in 2019 was 18% lower with US$2.3 billion compared with US$2.8 billion raised in 2018.
Total corporate funding (including VC funding, public market, and debt financing) for the battery storage, smart grid, and energy efficiency sectors in 2019 was down by 22% with US$3.8 billion compared with US$4.9 billion in 2018.
In 2019, VC funding into battery storage companies increased by 103% to US$1.7 billion in 32 deals compared with US$850 million raised in 49 deals in 2018. This increase was primarily because of Northvolt’s US$1 billion deal in Q2 2019. Total corporate funding, including debt and public market financing, increased to US$2.8 billion in 2019 compared with US$1.3 billion in 2018.
Lithium-ion (Li-ion) based battery technology companies received the most funding in 2019 with US$1.4 billion. Other categories that received funding included gravity storage, flow batteries, CAES, energy storage downstream, fuel cells, liquid metal batteries, thermal energy storage, solid-state batteries, sodium-based batteries, and zinc-air batteries.
The top VC funded companies in 2019 were Northvolt with US$1 billion, Sila Nanotechnologies with US$170 million and US$45 million in two separate deals, Energy Vault with US$110 million, and Romeo Power with US$89 million.
78 VC investors participated in battery storage deals in 2019 compared with 73 in 2018. BASF Venture Capital, Breakthrough Energy Ventures, and Macquarie Capital were the top investors in 2019. Utilities and oil and gas companies were involved in seven battery storage funding deals in 2019.
In 2019, announced debt and public market financing for battery storage companies increased to US$1.1 billion in 10 deals compared with US$494 million in 12 deals in 2018. Northvolt’s US$393 million loan was the largest debt financing deal in 2019.
There were 10 M&A transactions in the battery storage category in 2019, of which only two disclosed transaction amounts. In 2018, there were 16 M&A transactions, three of which disclosed transaction amounts.
The most prominent M&A transaction in the battery storage space was the acquisition of Sonnen by oil major, Shell, early on in the year.
Smart grid companies raised US$300 million in VC funding in 38 deals in 2019, a 43% decrease compared with the US$530 million raised in 29 deals in 2018. Total corporate funding, including debt and public market financing, came to US$372 million in 41 deals, compared with US$1.8 billion in 33 deals in 2018.
The top VC funded companies in 2019 were Smart Wires, which brought in US$75 million; eSmart Systems, which received US$34 million; SmartRent, which secured US$32 million; CleanSpark with US$20 million; and Volta Charging with US$20 million.
78 investors funded smart grid companies in 2019, compared with 69 in 2018. The top VC investor in 2019 was Shell, which was involved in four funding deals, followed by Energy Impact Partners with three deals. Other prominent investors included Total and Centrica with two deals each.
Grid optimization companies had the largest share of VC funding in 2019 with US$85 million in four deals, followed by data analytics companies with US$58 million in six deals and smart grid communications companies with US$52 million in five deals.
In 2019, three debt and public market financing deals totaling US$72 million were announced compared with US$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.
VC funding for energy efficiency companies in 9M 2019 was flat with US$268 million compared with the US$265 million raised in 9M 2018. The top five VC funding deals in 9M 2019 included Kinestral Technologies, which raised US$100 million; Budderfly, which raised US$55 million; Cimcon Lighting, which raised US$33 million; Carbon Lighthouse, which secured US$33 million; and 75F, which received US$18 million.
A total of 33 VC investors participated in energy efficiency funding in 9M 2019. Announced debt and public market financing activity in the first nine months of 2019 (US$56 million in two deals) was 74% lower compared with 9M 2018 when US$212 million went into two deals. In 9M 2019, there were a total of nine efficiency M&A transactions (two disclosed), compared with three transactions (all undisclosed) in 9M 2018.
To view a chart on battery storage, smart grid, energy efficiency top disclosed M&A transactions in 2019, visit here.
A copy of the report can be found here.