Total corporate funding (including venture capital funding, public market, and debt financing) for the energy storage, smart grid, and energy efficiency sectors in 2022 was up 63% with $31.7 billion compared to $19.5 billion in 2021.
To get a copy of the report, visit: https://mercomcapital.com/product/annual-q4-2022-funding-ma-report-for-storage-grid-efficiency
“Funding into energy storage continued to grow at record levels in 2022; however, some of the funding activity shifted from venture capital and private equity to public market and debt and debt financing. In addition to record funding activity, energy storage companies and projects were also acquired in record numbers, a reflection of maturity in energy storage markets and assets. The global energy transition, and the shift toward EVs, along with the Inflation Reduction Act, provided strong tailwinds for energy storage companies,” said Raj Prabhu, CEO of Mercom Capital Group.
Energy Storage
Total corporate funding in the energy storage sector was up 55% with $26.4 billion in 2022 (highest in a year to date), compared to $17 billion in 2021. VC funding for energy storage companies decreased 34% with $5.8 billion in 2022 compared to $8.8 billion in 2021.
Lithium-ion-based battery technology companies received the most VC funding in 2022. Other categories that received funding included battery recycling, iron-air batteries, solid-state batteries, and energy storage systems.
The top VC-funded companies in 2022 were: Eolian ($925 million), Form Energy ($450 million), Group14 Technologies ($400 million), Ascend Elements ($300 million), and Hydrostor ($250 million).
In 2022, announced debt and public market financing for energy storage companies increased 151% with $20.6 billion in 28 deals compared to $8.2 billion raised in 2021. Six energy storage companies went public in 2022 compared to four in 2021.
A record 28 energy storage companies were acquired in 2022 – the most since 2014.
Energy storage project acquisition deals increased over 20% with 45 transactions in 2022 compared to 37 in 2021. A record 14.6 GW of energy storage and solar + storage projects were acquired in 2022, a 400% increase YoY compared to 3 GW in 2021.
Smart Grid
Smart grid companies raised $3.3 billion in VC funding in 46 deals in 2022, a 175% increase compared to $1.2 billion raised in 35 deals in 2021. This was the largest amount of VC funding raised by smart grid companies since 2010. Total corporate funding, including debt and public market financing, came to $4.7 billion in 58 deals in 2022 compared to $2 billion in 38 deals in 2021.
The top VC-funded companies in 2022 were: TeraWatt Infrastructure ($1 billion), GRIDSERVE ($243 million), Arcadia ($200 million), Sense ($128 million), and Be.EV ($127 million).
Smart charging companies had the largest share of VC funding in the sector in 2022 with $2.2 billion in 26 deals, followed by distributed generation and integration companies with $375 million in seven deals, and data analytics companies with $342 million in four deals.
In 2022, there were 20 M&A transactions recorded in the smart grid sector compared to 19 transactions in 2021.
Efficiency
VC funding for energy efficiency companies came to $490 million in nine deals in 2022 compared to $122 million in seven deals in 2021. Total corporate funding, including debt and public market financing, reached $540 million in 2022 compared to $465 million in 2021.
The top disclosed VC-funded companies in 2022 were: Redaptive ($200 million), GridPoint ($75 million), OhmConnect ($55 million), and Elevation ($20 million).
In 2022, debt and public market financing announced by energy efficiency companies decreased with $50 million in one deal compared to $343 million in one deal in 2021.
To get a copy of the report, visit: https://mercomcapital.com/product/annual-q4-2022-funding-ma-report-for-storage-grid-efficiency
By Raj Prabhu
