Mercom Capital Group, a global clean energy research and communications firm, 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 Efficiency companies in 2019 was 18% lower with $2.3 bil compared to $2.8 bil raised in 2018.
Total corporate funding (including venture capital funding, public market, and debt financing) for the Battery Storage, Smart Grid, and Energy Efficiency sectors in 2019 was down by 22% with $3.8 bil compared to $4.9 bil in 2018.
In 2019, VC funding into Battery Storage companies increased by 103% to $1.7 billion in 32 deals compared to $850 mil raised in 49 deals in 2018. This increase was primarily due to Northvolt’s $1 bil deal in Q2 2019. Total corporate funding, including debt and public market financing, increased to $2.8 bil in 2019 compared to $1.3 bil in 2018.
Lithium-ion based battery technology companies received the most funding in 2019 with $1.4 bil. 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 $1 bil, Sila Nanotechnologies with $170 mil and $45 mil in two separate deals, Energy Vault with $110 mil, and Romeo Power with $89 mil.
Seventy-eight VC investors participated in Battery Storage deals in 2019 compared to 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 $1.1 bil in 10 deals compared to $494 mil in 12 deals in 2018. Northvolt’s $393 mil 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 in the year.
Smart Grid companies raised $300 mil in VC funding in 38 deals in 2019, a 43% decrease compared to the $530 mil raised in 29 deals in 2018. Total corporate funding, including debt and public market financing, came to $372 mil in 41 deals, compared to $1.8 bil in 33 deals in 2018.
The top VC funded companies in 2019 were Smart Wires, which brought in $75 mil, eSmart Systems, which received $34 mil, SmartRent, which secured $32 mil, CleanSpark with $20 mil, and Volta Charging with $20 mil.
Seventy-eight investors funded Smart Grid companies in 2019, compared to 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 $85 mil in four deals, followed by Data Analytics companies with $58 mil in six deals and Smart Grid Communications companies with $52 mil in five deals.
In 2019, three debt and public market financing deals totaling $72 mil were announced compared to $1.3 bil 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 fell sharply with $298 mil in nine deals in 2019 compared to $1.5 bil in 23 deals in 2018, an 80% decrease largely due to the $1.1 bil deal raised by architectural dynamic glass developer, View, in Q4 2018. Total corporate funding, including debt and public market financing, reached more than $670 mil in 2019 compared to $1.7 bil in 2018.
The top VC funded companies in 2019 were: Kinestral Technologies, which raised $100 mil, followed by Budderfly with $55 mil, CIMCON Lighting with $33 mil, Carbon Lighthouse with $33 mil, and Arcadia Power with $30 mil.
A total of 38 investors participated in funding deals in 2019 compared to 72 investors in 2018. Energy Impact Partners was the most active investor in 2019.
In 2019, debt and public market financing announced by Energy Efficiency companies rose to $371 mil in three deals compared to $277 mil raised in the same number of deals in 2018.
In 2019 there were three Property Accessed Clean Energy (PACE) financing deals bringing in $709 mil compared to the same number of deals that brought in $694 mil in 2018.
M&A activity for Efficiency companies in 2019 increased with nine transactions, two of which disclosed the transaction amount. In 2018, there were seven M&A transactions with one that disclosed the transaction amount.
To get a copy of the report, visit: mercomcapital.com/product/2019-q4-annual-funding-ma-report-storage-grid-efficiency
Mercom Capital Group is a global communications and research and consulting firm focused on cleantech. Mercom delivers market intelligence and funding and M&A reports covering Battery Storage, Smart Grid and Energy Efficiency, and Solar, and advises companies on new market entry, custom market intelligence and strategic decision-making. Mercom's communications division helps companies and financial institutions build powerful relationships with media, analysts, local communities, and strategic partners. About Mercom: mercomcapital.com. Mercom's clean energy reports: store.mercom.mercomcapital.com/page/.