Global corporate funding, including venture capital (VC), public market, and debt financing, for battery storage, smart grid, and energy efficiency companies stood at $19.5 billion in 2021, according to Mercom’s 2021 Funding and M&A Report for Storage, Grid, & Efficiency. This was a 140% year-over-year (YoY) increase compared to $8.1 billion in 2020.

In 2021, global VC funding also jumped 290% to $10.1 billion, compared to $2.6 billion raised in the same period last year.

“VC investment 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 Raj Prabhu, Chief Executive Officer, Mercom Capital Group.

Battery Storage

Battery storage companies raised $17 billion – a record since 2014 – in 101 deals in 2021, a 159% YoY increase.

In 2021, global VC funding for battery storage companies stood at $8.8billion in 81 deals, a 470% growth compared to $1.6 billion in the last year.

The report noted that the 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, gravity storage, and metal-hydrogen batteries.

Some of the top VC funding deals in 2021 included $2.8 billion raised by Northvolt, $2.6 billion raised by SVOLT in two deals, $590 million raised by Sila Nanotechnologies, $326 million raised by ProLogium, $240 million each raised by Nexamp and Form Energy, and $144 million raised by Ambri.

In 2021, 260 VC investors participated in battery storage deals compared to 105 last year. Breakthrough Energy Ventures was the top investor in 2021.

According to the report, announced debt and public market financing increased to $8.2 billion in 20 deals in 2021. It was the highest amount raised 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,” the report noted.

In 2021, four battery storage companies went public; two merged with special purpose acquisition companies (SPAC), and two went public through the IPO route.

The sector witnessed 24 corporate merger and acquisitions (M&A) transactions in 2021.

In 2021, there were 37 battery storage project M&A deals compared to 24 in the last years. 3 GW of battery storage projects were acquired in 2021, compared to 2.5 GW in 2020.

Smart Grid

Global corporate funding for smart grid companies stood at $2 billion in 38 deals in 2021 compared to $758 million raised in 41 deals last year.

In 2021, smart grid companies raised $1.2 billion in VC funding in 35 deals, a 55% growth compared to $748 million raised in 38 deals in 2020.

Some of the 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.

In 2021, 129 investors funded smart grid companies compared to 102 in the last years. Energy Impact Partners, National Grid Partners, bp Ventures, David Helgason, GS Futures, MCJ Collective, and Moore Strategic Ventures were the top VC investors in 2021.

The report stated that smart charging companies secured the largest share of VC funding in 2021 with $789 million in 18 deals. It was followed by distributed generation and integration companies with $155 million in six deals and data analytics companies with $116 million in three deals.

The sector witnessed 19 M&A transactions in 2021 compared to 21 in the last year.

Efficiency

In 2021, energy efficiency companies raised $122 million in seven deals in VC funding compared to $291 million raised in 16 deals during the last year.

Global corporate funding, including debt and public market financing, stood at $465 million in 2021 compared to $791 million in 2020.

Some of the top VC funding deals included $72 million raised by Tendril, $20 million raised by Mysa, $15 million raised by Cohesion, $10 million raised by WattBuy, and $5 million raised by 75F.

In 2021, 29 investors participated in funding deals compared to 52 last year. WIND Ventures was the most active investor in 2021.

The sector witnessed three M&A transactions in 2021 compared to four in 2020.