Mercom Capital Group released its recent report on funding and mergers and acquisitions (M&A) activity for the global Battery Storage, Smart Grid, and Energy Efficiency sectors for the third quarter (Q3) and nine months (9M) of 2021.
Total corporate funding (including venture capital funding, public market, and debt financing) for Battery Storage, Smart Grid, and Efficiency companies in 9M 2021 was up 184% year-over-year (YoY) with a record $13.5 billion compared to $4.7 billion raised in 9M 2020 when the market was affected by COVID-19.
Global VC funding (venture capital, private equity, and corporate venture capital) for Battery Storage, Smart Grid, and Efficiency companies came in 235% higher in 9M 2021 with $6.5 billion compared to $1.9 billion in 9M 2020. Investments continue to rise, with battery storage companies poised to play a vital role in the transition from fossil fuels to renewables.
In Q3 2021, VC funding for Battery Storage, Smart Grid, and Efficiency companies decreased with $1.6 billion in 34 deals compared to $3.6 billion in 28 deals in Q2 2021. Q2 2021 funding activity was high primarily due to a multi-billion-dollar deal in the Battery Storage sector. Funding amounts were 49% higher YoY compared to the $1.1 billion raised in 22 deals in Q3 2020.
Battery Storage
In 9M 2021, a record $11.4 billion was raised in corporate funding in 73 deals, up 244%, compared to the $3.5 billion raised in 35 deals in 9M 2020. Following the corporate funding drop in Q1 2020 (due to the COVID-19 pandemic), funding levels have continued to improve each quarter.
VC funding in Battery Storage companies in 9M 2021 was up significantly (363%) with $5.5 billion in 59 deals compared to $1.2 billion in 21 deals in 9M 2020. This is the highest ever amount of funding received by Battery Storage companies in a 9M period. Northvolt's $2.75 billion funding round in Q2 2021 was a big part of the increase.
The Top 5 VC funding deals in 9M 2021 were: Northvolt, which raised $2.75 billion, Sila Nanotechnologies, which raised $590 million; Form Energy and Nexamp, which secured $240 million each, and Ambri, which raised $144 million. A total of 223 VC investors participated in Battery Storage funding in 9M 2021.
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Announced debt and public market financing activity in 9M 2021 ($5.8 billion in 14 deals) increased 152% compared to 9M 2020 when $2.3 billion was raised in 14 deals.
In 9M 2021, there were 15 Battery Storage M&A transactions compared to 11 transactions in 9M 2020.
In the first nine months of 2021, there were 31 battery storage project acquisitions compared to 15 in 9M 2020. Battery storage project acquisition activity doubled in both Q3 and 9M 2021.
Smart Grid
VC funding in Smart Grid companies in 9M 2021 was 46% higher with a record $936 million compared to the $643 million raised in 9M 2020.
In Q3 2021, VC funding for Smart Grid companies increased with $473 million in eight deals compared to $176 million in seven deals in Q2 2021. Funding amounts were 29% lower YoY compared to $368 million raised in 11 deals in Q3 2020.
The Top 5 VC funding deals in 9M 2021 were: Aulton, which raised $232 million, Ample which raised $160 million, Volta Charging, which brought in $125 million; Mainspring Energy, with $95 million; and FreeWire Technologies, which received $50 million.
Announced debt and public market financing for Smart Grid companies came to $831 million in three deals in 9M 2021 compared to $10 million in three deals in 9M 2020.
In 9M 2021, there were a total of 17 Smart Grid M&A transactions (one disclosed) compared to 18 transactions (four disclosed) in 9M 2020.
Efficiency
VC funding for Energy Efficiency companies in 9M 2021 was 95% lower with $5 million compared to the $95 million raised in 9M 2020.
One Energy Efficiency company each raised an undisclosed amount of VC funding in Q3 2021 and Q2 2021. In a YoY comparison, $48 million was raised in four deals in Q3 2020.
Announced debt and public market financing activity in the first nine months of 2021 ($343 million in one deal) was 31% lower compared to 9M 2020 when $500 million was raised in one deal.
In 9M 2021, there were two Efficiency M&A transactions ($300 million) compared to four transactions ($1.4 billion) in 9M 2020. (hcn)
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