Mercom Capital Group, LLC, a global clean energy communications and consulting firm, released its 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 first nine months (9M) of 2020.

To get a copy of the report, visit: https://mercomcapital.com/product/9m-q3-2020-funding-ma-report-storage-grid-efficiency

Chart: VC Funding 9M 2019-9M 2020

Global corporate funding (including venture capital funding, public market, and debt financing) for the Battery Storage, Smart Grid, and Energy Efficiency sectors in Q3 2020 came to $3.2 billion compared to $1.2 billion in Q2, a 165% increase quarter-over-quarter (QoQ). Funding was also higher by 777% year-over-year (YoY) compared to the $365 million raised in 20 deals the same quarter last year.

Despite COVID-19, total corporate funding for the Battery Storage, Smart Grid, and Energy Efficiency sectors in 9M 2020 was 75% higher with $4.7 billion raised compared to $2.7 billion in 9M 2019.

Global venture capital (VC) funding (venture capital, private equity, and corporate venture capital) increased in Q3 2020 with $1.1 billion in 22 deals compared to $605 million in 26 deals in Q2 2020, 78% growth QoQ. Funding was higher by 249% YoY compared to $309 million raised in 17 deals in Q3 2019.

Global VC funding for Battery Storage, Smart Grid, and Efficiency companies in 9M 2020 was slightly down with over $1.9 billion compared to $2.1 billion raised in 9M 2019.

Chart: Top VC Funded Deals in 9M 2020

Battery Storage

In 9M 2020, corporate funding for Battery Storage companies totaled $3.5 billion in 35 deals, 62% higher compared to $2.2 billion in 32 deals in 9M 2019. Corporate funding in Q3 2020 came to $2.8 billion in 16 deals, compared to $472 million in 10 deals in Q2 2020.

VC funding for Battery Storage companies in Q3 2020 was up 78%, with $661 million in seven deals compared to $372 million in eight deals in Q2 2020. The increase in funding was largely due to Northvolt's $600 million equity raise. In 9M 2020, funding was 25% lower with $1.2 billion in 21 deals compared to $1.6 billion in 25 deals in 9M 2019.

Chart: Battery Storage VC Funding Q3 2019-Q3 2020

VC Funding in Q3 2020 was spread across five categories: Lithium-based Batteries, Sodium-based Batteries, Metal-Hydrogen Batteries, Energy Storage Systems, and Thermal Energy Storage.

The Top 5 VC funding deals in 9M 2020 were: Northvolt's raise of $600 million, QuantumScape, which raised $200 million, ProLogium Technology raised $100 million, Demand Power Group secured $71 million, and Highview Power raised $46 million. A total of 28 VC investors participated in Battery Storage funding in Q3 2020.

Announced debt and public market financing for Battery Storage technology companies came to $2.1 billion in nine deals in Q3 2020. In 9M 2020, there was $2.3 billion raised in 14 deals, compared to seven deals bringing in $560 million in 9M 2019.

There were three M&A transactions involving Battery Storage companies in Q3 2020 compared to four transactions in Q2 2020. In a YoY comparison, there were four transactions in Q3 2019. In the first nine months of 2020, there were 11 transactions compared to 10 transactions in 9M 2019.

Seven project M&A transactions involving Battery Storage companies were executed in Q3 2020 compared to four in Q2 2020. In a YoY comparison, there were four transactions in Q3 2019. In the first nine months of 2020, there were 15 transactions compared to eight transactions in 9M 2019.

Smart Grid

Smart Grid VC funding in Q3 2020 was $368 million in 11 deals compared to $194 million in 14 deals in Q2 2020. In a YoY comparison, funding in Q3 2019 was $39 million in six deals. $643 million was raised in 32 deals in 9M 2020, 231% higher compared to $194 million raised in 28 deals in 9M 2019.

Chart: Smart Grid VC Funding Q3 2019-Q3 2020

VC Funding in Q3 2020 was spread across four Smart Grid technologies: Smart Charging, Distributed Generation and Integration, Smart Grid (SG) Communications, and Data Analytics.

The Top 5 VC funding deals in 9M 2020 were: ChargePoint with $127 million, Star Charge with $125 million, SmartRent with $60 million, Probus Smart Things with $53 million, and Smart Wires with $43 million.

Announced debt and public market financing for Smart Grid companies came to $10 million in three deals in 9M 2020 compared to $45 million in two deals in 9M 2019.

There were 12 Smart Grid M&A transactions in Q3 2020 compared to one transaction in Q2 2020. In a YoY comparison, there were five transactions in Q3 2019. In the first nine months of 2020, there were 18 transactions compared to 23 transactions in 9M 2019.

Efficiency

VC funding for Energy Efficiency technology companies increased in Q3 2020, with $48 million raised in four deals compared to $40 million raised in four deals in Q2 2020. In a YoY comparison, funding in Q3 2019 was $61 million in three deals. $95 million was raised in 11 deals in 9M 2020, 65% lower compared to $268 million raised in eight deals in 9M 2019.

VC Funding in Q3 2020 was spread across three sub-technologies: Energy Monitors/Dashboards, Data Center, and Efficient Home/Building.

The Top VC funding deals in 9M 2020 were: Palmetto raised $29 million, Juganu raised $18 million, BrainBox AI  secured $12 million, Virtual Power Systems raised $12 million, and SmartAC.com raised $10 million.

Announced debt and public market financing for Energy Efficiency companies in 9M 2020 totaled $500 million in one deal compared to the $56 million raised in two deals in 9M 2019.

There were three M&A transactions involving Energy Efficiency companies in Q3 2020. There were no M&A transactions in Q2 2020. In Q3 2019, there was one M&A transaction. In the first nine months of 2020, there were four transactions compared to nine transactions in 9M 2019.

Chart: Top M&A Transactions in 9M 2020

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