Mercom: $3.2B Corporate Funding For Battery Storage In Q3

Battery Storage, Smart Grid, And Efficiency Companies Raise Whooping $4.7 Billion In First Nine Months Of 2020, Registering 165% Increase Quarter-Over-Quarter, Says Mercom Capital
11:02 PM (Beijing Time) - 29. October 2020
Battery Storage Smart Grid And Efficiency

In Q3 2020, corporate funding for Battery Storage, Smart Grid, and Energy Efficiency sectors was higher by 777% year-over-year as compared to the $365 million raised in 20 deals the same quarter last year, according to Mercom's 9M and Q3/2020 Funding and M&A Battery Storage, Smart Grid, and Efficiency report. (Photo Credit: Mercom Capital)

Key Takeaways

  • Global corporate funding of Battery Storage, Smart Grid, and Energy Efficiency sectors rise by 165% quarter-over-quarter to $3.2 billion
  • The total corporate funding for Battery Storage companies in 9M 2020 was $3.5 billion in 35 deals
  • In Q3 2020, Smart Grid VC funding was $368 million through 11 deals
  • VC funding for Energy Efficiency technology companies increase in Q3 2020, with $48 million raised in four deals

As per a report released by consultant and research analyst Mercom Capital Group, the Battery Storage, Smart Grid, and Energy Efficiency sectors saw its global corporate funding (including venture capital funding, public market, and debt financing) rise by 165% quarter-over-quarter (QoQ) to $3.2 billion, as compared to $1.2 billion in Q2. The funding also grew by 777% year-over-year (YoY) compared to the $365 million raised in 20 deals the same quarter last year.

Even the COVID situation could not stop the growth of total corporate funding for these sectors in 9M 2020, which was 75% higher with $4.7 billion raised compared to $2.7 billion in 9M 2019.

The global venture capital (VC) funding (venture capital, private equity, and corporate venture capital) saw an increase in Q3 2020, with $1.1 billion in 22 deals as compared to $605 million in 26 deals in Q2 2020, registering 78% growth QoQ. Funding was higher by 249% YoY compared to $309 million raised in 17 deals in Q3 2019.

Meanwhile, the global VC funding for Battery Storage, Smart Grid, and Efficiency companies in 9M 2020 was slightly down with over $1.9 billion compared to $2.1 billion raised in 9M 2019.

Battery Storage

The total corporate funding for Battery Storage companies in 9M 2020 was $3.5 billion in 35 deals. This was 62% higher compared to $2.2 billion in 32 deals in 9M 2019. Corporate funding in Q3 2020 was at $2.8 billion in 16 deals, while in Q2 2020, it was $472 million in 10 deals.

The VC funding for Battery Storage companies saw a rise of 78% in Q3 2020, with $661 million in seven deals compared to $372 million in eight deals in Q2 2020. The increase in funding can be attributed largely to Northvolt’s $600 million equity raise. Funding was 25% lower in 9M 2020 with $1.2 billion in 21 deals compared to $1.6 billion in 25 deals in 9M 2019.

In Q3 2020, Battery Storage VC Funding was spread across five categories: Lithium-based Batteries, Sodium-based Batteries, Metal-Hydrogen Batteries, Energy Storage Systems, and Thermal Energy Storage.

The leading five VC funding deals in 9M 2020 were:

  • Northvolt’s raise of $600 million,
  • QuantumScape, which raised $200 million,
  • ProLogium Technology raised $100 million,
  • Demand Power Group secured $71 million, and
  • Highview Power raised $46 million.

 

A total of 28 VC investors participated in Battery Storage funding in Q3 2020. Announced debt and public market financing for Battery Storage technology companies came to $2.1 billion in nine deals in Q3 2020. In 9M 2020, $2.3 billion raised in 14 deals, compared to seven deals bringing in $560 million in 9M 2019.

To add to this, there were three M&A transactions involving Battery Storage companies in Q3 2020 compared to four transactions in Q2 2020. In a YoY comparison, there were four transactions in Q3 2019. In the first nine months of 2020, there were 11 transactions compared to 10 transactions in 9M 2019.

In Q3 2020, seven project M&A transactions involving Battery Storage companies were executed as compared to four in Q2 2020. In a YoY comparison, there were four transactions in Q3 2019. In the first nine months of 2020, there were 15 transactions compared to eight transactions in 9M 2019.

Smart Grid

In Q3 2020, Smart Grid VC funding was $368 million in 11 deals compared to $194 million in 14 deals in Q2 2020. In a YoY comparison, funding in Q3 2019 was $39 million in six deals. About $643 million was raised in 32 deals in 9M 2020, 231% higher compared to $194 million raised in 28 deals in 9M 2019. The VC Funding in Q3 2020 was spread across four Smart Grid technologies: Smart Charging, Distributed Generation and Integration, Smart Grid (SG) Communications, and Data Analytics.

The Top 5 VC funding deals in 9M 2020 were:

  • ChargePoint with $127 million,
  • Star Charge with $125 million, SmartRent with $60 million,
  • Probus Smart Things with $53 million, and
  • Smart Wires with $43 million.

Announced debt and public market financing for Smart Grid companies came to $10 million in three deals in 9M 2020 compared to $45 million in two deals in 9M 2019. There were 12 Smart Grid M&A transactions in Q3 2020 compared to one transaction in Q2 2020. In a YoY comparison, there were five transactions in Q3 2019. In the first nine months of 2020, there were 18 transactions compared to 23 transactions in 9M 2019.

Efficiency

VC funding for Energy Efficiency technology companies saw an increase in Q3 2020, with $48 million raised in four deals compared to $40 million raised in four deals in Q2 2020. In a YoY comparison, funding in Q3 2019 was $61 million in three deals. About $95 million was raised in 11 deals in 9M 2020, 65% lower compared to $268 million raised in eight deals in 9M 2019. The VC Funding in Q3 2020 was spread across three sub-technologies: Energy Monitors/Dashboards, Data Center, and Efficient Home/Building. Announced debt and public market financing for Energy Efficiency companies in 9M 2020 totalled to $500 million in one deal compared to the $56 million raised in two deals in 9M 2019.

The Top VC funding deals in 9M 2020 were:

  • Palmetto raised $29 million,
  • Juganu raised $18 million,
  • BrainBox AI  secured $12 million,
  • Virtual Power Systems raised $12 million, and
  • SmartAC.com raised $10 million.

There were three M&A transactions involving Energy Efficiency companies in Q3 2020. Q2 2020 saw no M&A transactions, while Q3 2019 had seen one. In the first nine months of 2020, there were four transactions compared to nine transactions in 9M 2019.

The report is available for a price starting at $299 on Mercom’s website. 

Anu Bhambhani

Anu Bhambhani is the Senior News Editor of TaiyangNews

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