Battery Storage, Smart Grid, and Energy Efficiency Companies Bring in $2.8 Billion in VC Funding in 2018

21 Jan 2019

Mercom Capital Group, llc, a global clean energy research and communications firm, released its report on funding and mergers and acquisitions (M&A) activity for the Battery Storage, Smart Grid, and Energy Efficiency sectors for 2018.=

In 2018, $2.8 billion was raised by Battery Storage, Smart Grid, and Energy Efficiency companies, an increase from the $1.5 billion raised in 2017.

Battery Storage

In 2018, VC funding into Battery Storage companies increased by 19 percent to $850 million in 49 deals compared to $714 million raised in 30 deals in 2017. Total corporate funding, including debt and public market financing, increased to $1.3 billion in 2018 compared to $890 million in 2017.

Lithium-ion based battery technology companies received the most funding with $236 million followed by Energy Storage Systems companies with $193 million.

The top VC funded companies in 2018 were: QuantumScape with $100 million, Stem with $80 million, sonnen brought in $71 million, Sila Nanotechnologies raised $70 million, and Ionic Materials raised $65 million.

Seventy-three VC investors participated in Battery Storage deals in 2018 compared to 86 in 2017.

In 2018, announced debt and public market financing for Battery Storage companies increased to $490 million in 11 deals compared to $177 million in 12 deals in 2017. Bloom Energy’s $270 million IPO was the largest public market financing deal in 2018.

Three Battery Storage project funds totaling $352 million were announced in 2018 compared to $446 million in the same number of deals in 2017. 

In 2018, 11 Battery Storage project funding deals were announced totaling $434 million.

There were 16 M&A transactions in the Battery Storage category in 2018, of which only three disclosed transaction amounts. In 2017, there were three M&A transactions, two of which disclosed transaction amounts.

Smart Grid

Smart Grid companies raised $530 million in VC funding in 29 deals in 2018, a 26 percent increase compared to the $422 million raised in 45 deals in 2017. Total corporate funding, including debt and public market financing, came to $1.8 billion in 33 deals, compared to $1.2 billion in 50 deals in 2017.

The top VC funded companies in 2018 were ChargePoint, which brought in $240 million, Smart Wires which received $55 million, Volta Charging which secured $35 million, AutoGrid raised $32 million, and Ample secured $31 million.

Sixty-nine investors funded Smart Grid companies in 2018, compared to 88 in 2017. Top VC investors in 2018 included: Energy Impact Partners, E.ON, Orstead, Shell Ventures, and WindSail Capital Group. 

Smart Charging of plug-in hybrid electric vehicle (PHEV), vehicle-to-grid (V2G) companies, had the largest share of VC funding in 2018 with $348 million in nine deals, followed by Grid Optimization companies with $59 million in two deals.

In 2018, four debt and public market financing deals totaling $1.3 billion were announced, compared to $774 million in five deals in 2017, a 67 percent increase. There were no IPOs announced for Smart Grid companies in 2018.

In 2018, there were 12 undisclosed M&A transactions recorded in the Smart Grid sector. In 2017, there were 27 transactions (seven disclosed) for $2.5 billion.

Efficiency

VC funding for Energy Efficiency companies jumped to $1.5 billion in 23 deals in 2018 compared to $384 million in 38 deals in 2017. Total corporate funding, including debt and public market financing, reached more than $1.7 billion in 2018, compared to $3.3 billion in 2017.

The top VC funded companies were View, which raised $1.1 billion, followed by UrbanVolt with $64 million, ecobee with $61 million and $36 million in two deals, and tado° brought in $50 million.

A total of 72 investors participated in funding deals in 2018 compared to 51 investors in 2017. Energy Impact Partners was the most active investor in 2018.

In 2018, debt and public market financing announced by Energy Efficiency companies fell to $277 million in three deals from $2.9 billion raised in 16 deals in 2017. 

2018 saw three Property Accessed Clean Energy (PACE) financing deals bring in more than $694 million compared to seven deals that brought in $1.6 billion in 2017. 

M&A activity for Efficiency companies in 2018 dropped to seven transactions, one of which disclosed the transaction amount. In 2017, there were 10 M&A transactions with three that disclosed transaction amounts.

The only disclosed transaction was the $120 million acquisition of Lime Energy by Willdan Group.

Mercom Capital Group | http://www.mercomcapital.com