Consulting firm Mercom Capital Group has released a new report exploring corporate funding in battery storage, smart grid and energy efficiency during the first nine months of 2020.
According to the study, corporate funding in the three sectors reached $4.7 billion during the first nine months of 2020.
In the third quarter alone, global corporate funding (including venture capital funding, public market, and debt financing) for the battery storage, smart grid, and energy efficiency sectors reached $3.2 billion compared to $1.2 billion in Q2. This marks 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 the first nine months of 2020 was 75% higher with $4.7 billion raised compared to $2.7 billion during the same period last year.
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 in the first nine months of 2020 was slightly down with just over $1.9 billion compared to $2.1 billion raised in over the same period in 2019.
Battery Storage
In the first nine months of 2020, corporate funding for battery storage companies totaled $3.5 billion in 35 deals, 62% higher compared to $2.2 billion in 32 deals during the same period last year. Corporate funding in Q3 2020 came to $2.8 billion in 16 deals, compared to $472 million in 10 deals in Q2 2020.
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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. In the first nine months of 2020, funding was 25% lower with $1.2 billion in 21 deals compared to $1.6 billion in 25 deals in the same period in 2019.
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.
Announced debt and public market financing for battery storage technology companies came to $2.1 billion in nine deals in Q3 2020. In the first nine months of 2020, there was $2.3 billion raised in 14 deals, compared to seven deals bringing in $560 million in the same period in 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 the same period in 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 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 the first nine months of 2020, 231% higher compared to $194 million raised in 28 deals in 2019.
VC Funding in Q3 2020 was spread across four smart grid technologies: smart charging, distributed generation and integration, smart grid communications, and data analytics.
Announced debt and public market financing for smart grid companies came to $10 million in three deals in the first nine months of 2020 compared to $45 million in two deals within the same period in 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 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 by Q3 2020, 65% lower compared to $268 million raised in eight deals by Q3 in 2019.
VC Funding in Q3 2020 was spread across three sub-technologies: energy monitors/dashboards, data centers, and efficient home/building.
Announced debt and public market financing for energy efficiency companies by Q3 in 2020 totaled $500 million in one deal compared to the $56 million raised in two deals in 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 2019.
The report is available for download.
