While the renewable energy industry has suffered significant blows such as loss of employment during the COVID-19 crisis, venture capital (VC) funding into the battery energy storage sector in the first quarter of this year nonetheless saw a significant increase over the previous year’s equivalent period.
Corporate funding overall was in fact up 88% year-over-year in Q1 2020 to US$244 million over nine deals, from US$130 million in the first quarter of 2019 from the same number of deals, according to the latest funding and mergers and acquisitions (M&A) report from Mercom Capital Group. The company tallies up and publishes its quarterly report into funding and M&A activities in the battery storage, smart grid and energy efficiency sectors, including VC funds and their investments.
While it shows a big increase since the beginning of last year, momentum has dropped from the previous quarter when a massive US$635 million of funding went into the battery storage sector. That said, VC funding appears to be trending upwards: in Q1 2019, seven VC funding deals totalled US$78 million, in Q4 2019 seven VC deals netted companies in the sector US$126 million, whereas in the Q1 period of 2020, US$164 million was raised across just six deals by battery storage companies.
Energy-Storage.news reported in February that US developer EsVolta had secured a US$140 million credit facility for a project portfolio with industry debt financing specialist CIT the Mandated Lead in arranging it, and Mercom Capital noted that that amount raised made it the most noteworthy project financing transaction to close in the quarter. That said, this site also reported that AES Distributed Energy raised a much larger amount – US$341 million – in a transaction announced at around the same time as EsVolta’s, although the AES Distributed Energy deal was for debt financing.
Mercom Capital also noted that some significant M&A deals were announced in the sector, the most notable being the acquisition of the commercial and industrial (C&I) arm of Canadian developer NRStor by Blackstone Energy Partners.
While the full Mercom report includes more details and provides more depth on the quarter’s activities, a release seen by Energy-Storage.news did rank the top five battery storage sector deals by amount raised. These are as follows:
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