Proving the Business Case for the Internet of Things

VC funding for smart grid firms up 79%

Steve Rogerson
May 1, 2018



Smart grid, battery storage and energy efficiency companies raised $472m in venture capital (VC) funding in the first quarter of 2018, according to clean energy communications and consulting firm Mercom Capital. VC funding for smart grid companies increased 79 per cent in Q1 2018 with $75m in seven deals compared with $42mn in nine deals in Q4 2017. In Q1 2017, $164m was raised in 14 deals.
 
Corporate funding in smart grid came to $1.3bn in nine deals compared with $796m in 12 deals in Q4 2017. In a year-on-year comparison, $164m was raised in 14 deals in Q1 2017.
 
The top VC funded smart grid companies included: Bidgely, which secured $27m from Georgian Partners, Khosla Ventures, E.On, Innogy and Constellation Technology Ventures; Husk Power Systems received an equity investment of $20m from Shell Technology Ventures, Swedfund International and Engie Rassembleurs d’Energies; and Mnubo raised $16.5m from HSB Group. 
 
Fifteen investors participated in smart grid VC funding rounds during the quarter with SG Communications companies raising the most. A combined $1.3bn was raised in two debt financing deals in Q1 2018, compared with $754m raised in three deals in Q4 2017. 
 
One M&A transaction was announced in Q1 2018 and it did not disclose a transaction amount, compared with eight transactions (two disclosed) in Q4 2017. There were seven M&A transactions in Q1 2017.
 
Corporate funding in battery storage came to $299m in 12 deals compared to $154m in six deals in Q4 2017. In a year-over-year comparison, $80m was raised in ten deals in Q1 2017.
 
VC funding including private equity and corporate venture capital raised by battery storage companies in Q1 2018 jumped to $299m in 12 deals from $151m in five deals in Q4 2017 due to some large deals in the quarter. Year-over-year, funding was significantly higher compared with the $58m raised in eight deals in Q1 2017.
 
The top five VC funded battery storage companies in the quarter were: Stem, which raised $80m from Activate Capital; Ionic Materials secured $65m from Dyson, Samsung, A123, Hitachi, Renualt, Nissan and Mitsubishi; Durapower secured an investment of $40.18m from Banpu Infinergy and K-IX Ace; Battery Energy Storage Solutions (BESS) received about $38.5m in funding from Santander Corporate & Commercial; and $34m was raised by Solid Energy.
 
Fifteen investors participated in battery storage funding this quarter with energy storage systems companies raising the most.
 
There were four M&A transactions involving battery storage companies in Q1 2018 and the financial details of the transactions were not disclosed. In Q4 2017 and Q1 2017, there was one M&A transaction each that did not disclose a transaction amount. 
 
Corporate funding in energy efficiency came to $104m in five deals compared with $916m in 14 deals in Q4 2017. In a YoY comparison, $514m was raised in 17 deals in Q1 2017.
 
VC funding raised by energy efficiency companies in Q1 2018 remained steady at $98m in four deals compared with $95m in ten deals in Q4 2017. In a YoY comparison, $213m was raised in 14 deals in Q1 2017.
 
The top efficiency deals included: $61m raised by Ecobee from Energy Impact Partners and eight institutional investors including Thomvest, Relay Ventures and the Amazon Alexa Fund; $27m raised by Carbon Lighthouse from GRC SinoGreen Fund, JCI Ventures, SV Tech Ventures, EBay founder Pierre Omidyar’s Ulupono Initiative, Ekistic Ventures, Tom Steyer’s Radicle Impact Partners, former General Motors vice chairman Steve Girsky and Tesla chief technology officer Jeffrey Straubel; and $10m received by Petros Pace Finance from former Major League Baseball player Alex Rodriguez and his investment firm A-Rod.
 
Fifteen investors participated in VC funding in the quarter. Within the sector, temperature control companies brought in the most funding.
 
Debt and public market financing for efficiency companies fell to $6m in one deal this quarter compared with $621m in three deals in Q4 2017.
 
In Q1 2018, there was one M&A transaction (details not disclosed) while in Q4 2017, there were three M&A transactions, all undisclosed. In Q1 2017, there were four M&A transactions in the energy efficiency sector, two of which disclosed transaction details.