Corporate funding for battery storage companies increases globally: Report

New Delhi: Mercom Capital Group, a global clean energy research and communications firm, released its report on funding and mergers and acquisitions (M&A) activity in 2021 for the battery storage, smart grid, and energy efficiency sectors. Total corporate funding (including venture capital funding, public market, and debt financing) for the battery storage, smart grid, and energy efficiency sectors in 2021 globally was up by 140 percent, with $19.5 billion compared to $8.1 billion in 2020.

Global VC funding (venture capital, private equity, and corporate venture capital) for battery storage, smart grid, and energy efficiency companies in 2021 was 290 percent higher with $10.1 billion compared to $2.6 billion raised in 2020.

"VC investments into battery storage companies exploded in 2021, and for the first time, funding activity reflected the significance of battery energy storage in the energy transition. We expect funding activity to remain robust as substantially more investments are needed to get battery technologies off the ground and into commercial stages at scale," said Mercom Capital Group's CEO Raj Prabhu.

Total corporate funding in the battery storage sector was up 159 percent, with $17 billion in 101 deals in 2021. Funding raised in 2021 was the highest since 2014, and the deal count nearly doubled compared to 2020.

VC funding for battery storage companies totalled $8.8 billion in 81 deals, compared to $1.6 billion raised in 32 deals in 2020, a 470 percent increase.

Lithium-ion-based battery technology companies received the most VC funding in 2021. Other categories that received funding included energy storage systems, solid-state batteries, flow batteries, thermal energy storage, liquid metal batteries, solid-state batteries, gravity storage, and metal-hydrogen batteries.

The top VC-funded companies in 2021 were Northvolt with $2.8 billion, SVOLT with $2.6 billion in two deals, Sila Nanotechnologies with $590 million, ProLogium Technology with $326 million, Nexamp with and Form Energy with $240 million each, and Ambri with $144 million.

Two hundred and sixty VC investors participated in battery storage deals in 2021 compared to 105 in 2020. Breakthrough Energy Ventures was the top investor in 2021.

In 2021, announced debt and public market financing for battery storage companies increased significantly with $8.2 billion in 20 deals. This was the highest amount raised in debt and public market financing since 2014. Plug Power's $2 billion stock offering and SK Group's $1.6 billion capital investment in Plug Power were the largest public market financing deals in 2021.

Four battery storage companies went public in 2021; two merged with special-purpose acquisition companies (SPAC), and two went public through the traditional IPO route.

There were 24 M&A transactions in the battery storage category in 2021.

A total of 37 battery storage project M&A transactions were announced in 2021 compared to 24 in 2020. Three GW of battery storage projects were acquired in 2021 compared to 2.5 GW in 2020.

Smart Grid

Smart grid companies raised $1.2 billion in VC funding in 35 deals in 2021, a 55% increase compared to $748 million raised in 38 deals in 2020. Total corporate funding, including debt and public market financing, came to $2 billion in 38 deals compared to $758 million in 41 deals in 2020.

Top VC-funded companies in 2021 were Aulton with $232 million, Ample with $160 million, Volta with $125 million, Mainspring Energy with $95 million, and AutoGrid Systems with $85 million.

A total of 129 investors funded smart grid companies in 2021 compared to 102 in 2020. The top VC investors in 2021 were Energy Impact Partners, National Grid Partners, BoxGroup, bp Ventures, David Helgason, GS Futures, MCJ Collective, and Moore Strategic Ventures.

Smart charging companies had the largest share of VC funding in the sector in 2021 with $789 million in 18 deals, followed by distributed generation and integration companies with $155 million in six deals and data analytics companies with $116 million in three deals.

In 2021, there were 19 M&A transactions recorded in the smart grid sector compared to 21 transactions in 2020.

Efficiency

VC funding for energy efficiency companies came to $122 million in seven deals in 2021 compared to $291 million in 16 deals in 2020. Total corporate funding, including debt and public market financing, reached $465 million in 2021 compared to $791 million in 2020. The top disclosed VC-funded companies in 2021 were Tendril with $72 million, followed by Mysa with $20 million, Cohesion with $15 million, WattBuy with $10 million, and 75F with $5 million.

A total of 29 investors participated in funding deals in 2021 compared to 52 in 2020. WIND Ventures was the most active investor in 2021.

In 2021, debt and public market financing announced by energy efficiency companies decreased with $343 million in one deal compared to $500 million in one deal in 2020.

M&A activity for efficiency companies in 2021 decreased with three transactions. In 2020, there were four M&A transactions.

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