Global corporate funding, including venture capital (VC) funding, public market and debt financing for battery storage, smart grid, and efficiency companies in the first nine months (9M) of 2021, was at a record high of $13.5 billion, according to Mercom’s 9M and Q3 2021 Funding and M&A Report for Storage, Grid and Efficiency. This was 184% year-over-year (YoY) higher compared to $4.7 billion raised in 9M 2020 when the market was affected by the Covid-19.
In 9M 2021, global VC funding also jumped 235% to $6.5 billion, compared to $1.9 billion in the same period last year. The report said investments would continue to rise as battery storage companies would play a vital role in transitioning to renewables from fossil fuels.
According to the report, global VC funding for battery storage, smart grid, and efficiency companies stood at $1.6 billion in 34 deals in the third quarter (Q3) of 2021, a 55.5% decline compared to $3.6 billion raised in 28 deals in the previous quarter. However, global VC funding was 49% up YoY compared to $1.1 billion raised in 22 deals in Q3 2020.
Battery storage companies raised a record $11.4 billion in corporate funding through 73 deals in 9M 2021, a 244% increase compared to $3.5 billion raised in 35 deals in the same period last year. The report said funding levels had improved every quarter since Q1 2020. The funding activity had slumped in Q1 2020 due to the Covid-19 impact.
In 9M 2021, global VC funding in battery storage companies stood at $5.9 billion in 59 deals, a 363% growth than $1.2 billion raised through 21 deals in 9M 2020. This is the all-time high amount of funding raised by battery storage companies in a 9M period. Northvolt’s $2.75 billion funding round in Q2 2021 was a big chunk of funding increase.
Some of the top VC funding deals in 9M 2021 included $2.75 billion raised by NorthVolt, $590 million secured by Sila Nanotechnologies, $240 million each raised by Form Energy and Nexamp, and $144 million secured by Ambri.
A total of 223 VC investors participated in Battery Storage funding in 9M 2021.
The report stated that in 9M 2021, announced debt and public financing market activity escalated to $5.8 billion in 14 deals, a 152% increase compared to $2.3 billion raised through 14 deals in 9M 2020.
In 9M 2021, the sector witnessed 15 battery storage merger and acquisition (M&A) transactions compared to 11 transactions in the same period last year.
There were 31 battery storage project acquisitions compared to 15 in 9M 2020. The project acquisition activity doubled in Q3 and 9M 2021.
Smart grid companies raised a record $936 million in VC funding in 9M 2021, a 46% growth compared to $643 million raised in 9M 2020.
In Q3 2021, VC funding for smart grid companies increased 168.75% to $473 million compared to $176 million in seven deals in the previous quarter. However, the funding was down 29% YoY than $368 million raised through 11 deals in Q3 2020.
Some of the top VC funding deals in 9M 2021 included $232 million raised by Aulton, $160 million secured by Ample, $125 million raised by Volta Charging, $95 million secured by Mainspring Energy, and $50 million received by FreeWire Technologies.
In 9M 2021, announced debt and public market financing for smart grid companies stood at $831 million in three deals, compared to $10 million in three deals in the same period last year.
There were 17 (one disclosed) smart grid M&A transactions in 9M 2021 compared to 18 transactions (four disclosed) in 9M 2020.
In 9M 2021, VC funding for energy efficiency companies declined 95% to $5 million compared to $95 million raised in 9M 2020.
As per the report, announced debt and public financing activity for energy efficiency companies declined 31% to $343 million in one deal in 9M 2021 from $500 million in one deal in the same period last year.
In 9M 2021, there were two efficiency M&A transactions of $300 million, compared to four transactions of $1.4 billion in 9M 2020.