Click here to download our Annual and Q4 2023 Funding and M&A Executive Summary on Energy Storage and Smart Grid.

Total corporate funding (including venture capital funding, public market, and debt financing) for the energy storage and smart grid sectors in 2023 was down 29% with $22.3 billion compared to $31.2 billion in 2022.

“Energy storage companies saw their highest VC funding in 2023, largely thanks to the Inflation Reduction Act’s Investment Tax Credit and other incentives like manufacturing credits for battery components. Despite this positive trend, M&A activity lagged due to high asset valuations, elevated interest rates, and investor caution,” said Raj Prabhu, CEO of Mercom Capital Group.

Energy Storage

Venture capital (VC/PE) funding in Energy Storage in 2023 was the highest ever recorded, increasing 59% year-over-year (YoY), with $9.2 billion in 86 deals compared to the $5.8 billion raised in 96 deals in 2022. However, corporate funding in the Energy Storage sector, including VC/PE funding, decreased 28% YoY, with $19 billion raised in 120 deals compared to $26.4 billion raised in 124 deals in 2022.

Lithium-ion-based Battery Technology companies received the most VC funding in 2023. Other top-funded categories included Battery Recycling, Nickel-based Battery Technology, Energy Storage Downstream, and Materials and Components companies.

In 2023, 15 Energy Storage companies were acquired, compared to 28 in 2022.

Smart Grid

VC funding in the Smart Grid sector decreased 55% YoY, with $1.5 billion in 47 deals in 2023 compared to $3.3 billion in 46 deals in 2022. Corporate funding for Smart Grid companies was 30% lower YoY, with $3.3 billion in 60 deals compared to $4.7 billion in 58 deals in 2022.

In 2023, 13 debt and public market financing deals were announced, totaling $1.8 billion, compared to $1.4 million raised in 12 deals in 2022.

In 2023, there were 11 M&A transactions (four disclosed) in the Smart Grid sector. In 2022, there were 20 transactions (five disclosed).

Mercom Capital Group’s Energy Storage and Smart Grid Funding and M&A Reports are comprehensive high-quality reports delivering superior insight, market trends, and analysis. These reports help bring clarity to professionals in the current financial landscape of the smart grid industry.

The Quarterly Funding and M&A Reports contain quarter-over-quarter (QoQ) information on market activity displayed in easy-to-digest charts, graphs and tables, as well as data-driven analysis covering:

• Venture capital funding deals including top investors, QoQ trends, and a breakdown of charts and graphs by stage;
• VC funding by technology;
• Debt and other funding deals;
• Mergers and Acquisitions (M&A) including QoQ trends, with charts and graphs by technologies;
• Battery and storage funding deals;
• Smart Grid funding deals;
• Energy Efficiency funding deals;
• New cleantech funds;

This report also contains comprehensive lists of all announced deals and transactions during the quarter, including:

• VC deals and investors;
• M&A transactions and acquirers;
• New cleantech funds.

There were 193 companies and investors covered in this report. The report is 124 pages in length and contains 98 charts, graphs and tables.