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VC Funding for Battery Storage, Smart Grid and Energy Efficiency Companies Drops Over 50 Percent Year-to-Year in Q1 2019

*Courtesy Mercom Capital Group

Battery storage companies raised $78 million, smart grid companies $32 million and energy efficiency companies worldwide another $100 million from venture capital (VC) groups in 2019's fist quarter (Q1), down a sharp 56 percent from a collective $472 million in Q1 2018, according to Mercom Capital Group's latest quarterly market report.

 

  • Battery storage start-ups globally raised $130 million in nine transactions in Q1 from VC investors, when private equity and corporate VC and public market financing is included. That's a sharp, 57 percent drop from $299 million in 12 deals in Q1'18. Q1's tally was higher on a sequential quarterly basis, however; up 18 percent from $110 million in 14 deals from Q4'18, according to Mercom Capital's Battery Storage, Smart Grid, and Energy Efficiency and M&A 2019 First Quarter Report.

  • Total corporate funding for smart grid companies worldwide totaled just $32 million in 16 deals in Q1'19 as compared to $1.3 billion in nine in Q1'18, a year-to-year plunge of 98 percent. Q1'19's tally plummeted 89 percent on a sequential, quarterly basis, down from $266 million in nine transactions. Smart grid companies raised $32 million in 15 transactions from VC investors in Q1. That's down 88 percent from $266 million in seven transaction in Q1'18. ChargePoint raising $240 million in Q4'18 was largely responsible for the big drop, according to Mercom.

  • Total corporate funding for energy-efficiency companies plummeted to $155 million in two deals in Q1 as compared to $1.3 billion in eight in Q4'18. Bucking the trend, it was up 49 percent from $104 million in five deals in Q1'18. Energy-efficiency companies worldwide raised $100 million in just one transaction from VC investors in this year's first quarter. That's about level with the $98 million raised in four deals during Q1'18, but down very sharply from the $1.2 billion raised in seven deals in Q4'18, which was skewed heavily by View raising $1.1 billion, Mercom notes.

Q1'19 VC-battery storage funding

Zenobe raising $32 million from Jera and Tokyo Electric Power (Tepco) was the largest amount battery energy storage companies raised from VC investors in Q1'19. Sunfire raising $29 million from Paul Wurth, Inven Capital, Idinvest Partners, Total Energy Ventures and Sunfire Entrepreneurs Club was the second largest capital raise, with Ambri raising $17 million the third largest, according to Mercom's latest quarterly market report.

Utilities and oil and gas funds actively invested in both battery storage and smart grid companies in Q1, Mercom highlights. In addition to Tepco and Total Energy Ventures, Chevron Technology Ventures, Shell Ventures and Centrica invested in companies in these sectors, according to Mercom.

All told, 13 VC investors participated in funding battery storage companies in Q1'19. Downstream energy storage companies raised the most within the sector.

Turning to debt and public market financing, battery storage companies raised $52 million in two transactions, up from $44 million in three transactions in Q4'18 and zero announced in the year-ago quarter.

Four M&A deals took place in the VC battery storage sector in Q1'19, as well. Just one was disclosed. That compares to four undisclosed deals in Q1'18. In addition, one undisclosed project M&A deal took place in Q1 as compared to two, one undisclosed in Q4'18 and none in Q1'18.

Q1 VC funding for smart grid companies

Driivz raising $12 million from Inven Capital, CEZ Group's Investment Fund, Centrica and Ombu Group was the largest VC-smart grid fund raising to take place in Q1. EverCharge raising $6 million was the second largest, while Catalyze raised $5 million from Innosphere Fund and Prisma Energy, according to Mercom.

In addition, Logical Buildings raised $4 million and SensorFlow $3 million from Pierre Lorinet, Playfair Capital, Cocoon Capital, Entrepreneur First, 2be.lu Investments, Aurum Land and Insitu Asia Holdings.

All told, 32 VC investors participated in smart grid funding in Q1. Smart charging companies raised the most VC capital.

Turning to debt and public markets financing, there was just one, for $1 million, by smart grid companies in Q1 as compared to one for $6 million in Q4'18 and two, for $1.25 billion in the year-ago quarter.

There were nine smart grid M&A transactions announced in the energy-efficiency sector during Q1'19, as well, with just one being disclosed. There were three undisclosed in Q4'18 and one in Q1'18, according to Mercom.

VC funding for energy efficiency companies in Q1'19

A total of five investors participated in VC-energy efficiency funding in Q1'19 by Mercom's count.

Debt and public market financing dropped to $55 million in one deal as compared to $65 million in one during Q4'18 and $6 million, also in one deal, during Q1'18.

One disclosed M&A transaction took place in Q1 as compared to four (one disclosed) in Q4'18 and one undisclosed in Q1'18.

Utility and oil-and-gas companies made four acquisitions in the sector in Q1. Shell acquiring sonnen, greenlots and limejump were the three largest. In addition, Engie acquired tiko, developer of a fast-response, virtual power plant platform and smart home energy management system.

Andrew Burger's picture

Thank Andrew for the Post!

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Matt Chester's picture
Matt Chester on Apr 23, 2019 1:20 am GMT

This could be a significant trend-- but one that must be tracked over a number of years to gauge the news from the noise!

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