Global corporate funding, including venture capital (VC) funding, public market, and debt financing for battery storage, smart grid, and efficiency companies in the first half (1H) of 2021, was up over 593% year-over-year (YoY) with $10.4 billion compared to $1.5 billion raised in the same period last year, according to Mercom’s recently released report.

In 1H 2021, global VC funding also jumped 468% to $4.9 billion in 28 deals compared to $858 million in the same period last year. The report said investments would continue to increase as battery storage companies would play a vital role in transitioning to renewables from fossil fuels.

As per the report, global VC funding for battery storage, smart grid, and efficiency companies stood at $3.6 billion in 28 deals in the second quarter (Q2) of 2021, a 177% increase compared to $1.3 billion in 24 deals in Q1 2021. Global VC funding was 493% up YoY compared to the $605 million raised in 26 deals in Q2 2020. A multi-billion-dollar deal in the battery storage sector was the reason behind high funding activity in this quarter.

Battery storage

In the first half of 2021, battery storage companies raised $9.6 billion in corporate funding from 41 deals compared to $716 million raised in 19 deals in the same period last year. The report stated that funding levels had improved every quarter since Q1 2020. The funding activity was slumped in Q1 2020 due to the Covid-19 impact.

Global VC funding in battery storage companies stood at $4.4 billion in 33 deals in 1H 2021, a 720% rise compared to $536 million in 14 deals in the same period last year. In Q2 2021, Northvolt’s $2.75 billion funding round was a big chunk of funding increase.

Some of the top VC funding deals in 1H 2021 included $2.75 billion raised by Northvolt, $590 million raised by Sila Nanotechnologies, $139 million raised by SES, $132 million raised by EnergyNest, and $130 million raised by Solid Power.

A total of 106 VC investors participated in battery storage funding in 1H 2021.

The report stated that in 1H 2021, announced debt and public financing market activity escalated to $5.2 billion in eight deals compared to $180 million in five deals in the same period last year.

In 1H 2021, the sector witnessed five announced battery storage funding deals, totaling $781 million compared to $26 million in five deals in 1H 2020.

There were nine (two disclosed) battery storage merger and acquisition (M&A) transactions in 1H 2021, while M&A transaction in 1H 2020 was eight (all undisclosed).

Smart grid

In the first half of 2021, smart grid companies raised $463 million in VC funding, a 68% increase compared to $275 million raised in the same period last year.

However, VC funding for smart grid companies declined 39.10% to $176 million in seven deals in Q2 2021, compared to $287 million in 10 deals in Q1 2021. The funding amount also went down 9% YoY compared to $194 million raised in 14 deals in Q2 2020.

Some of the top VC funding deals in 1H 2021 included $125 million raised by Volta Charging, $95 million raised by Mainspring Energy, $50 million raised by FreeWire Technologies, $40 million raised by Wallbox, and $31 million raised by Voltus.

In 1H 2021, announced debt and public market financing for smart grid companies stood at $8 million in one deal, a 20% decline compared to $10 million in three deals in the same period last year.

There were 11 (all undisclosed) smart grind M&A transactions in 1H 2021 compared to six transactions (all undisclosed) in 1H 2020.

Efficiency

In the first half of 2021, energy efficiency companies raised $5 million, an 89% decline compared to $47 million raised in 1H 2020.

In Q2 2021, one energy company raised an undisclosed amount of VC funding. While $40 million was raised in four deals in Q2 2020. In Q1 2021, an energy efficiency company raised $5 million.

As per the report, in 1H 2021, announced debt and public market financing for energy efficiency company declined 31% to $343 million in one deal from $500 million in one deal in the same period last year.

In 1H 2021, there was one efficiency M&A transaction of $300 million, compared to one transaction of $1.4 billion in 1H 2020.