Proving the Business Case for the Internet of Things

Smart grid funding up in Q1 2020, say Mercom

Steve Rogerson
May 6, 2020



Smart grid, energy efficiency and battery storage companies raised $252m in venture capital funding in the first quarter of this year, according to Mercom Capital. This was up 20% on the $210m raised in Q1 2019.
 
Smart grid companies raised $81m of this with battery storage companies at $164m and energy efficiency firms at $7m.
 
Smart grid
Total corporate funding in smart grid came to $86m in nine deals compared with $32m in 16 deals in Q1 2019. VC funding for smart grid companies increased in Q1 2020 with $81m in seven deals compared with $32m in 15 deals in Q1 2019.
 
The top five VC funded smart grid companies were: Smart Wires, which secured $43m; GridBeyond raised $14m from Energias De Portugal, Act Venture Capital, Electricity Supply Board and Total Carbon Neutrality Ventures; Driivz raised $11m from Gilbarco Veeder-Root and Centrica Innovations; Leap raised $8m from Union Square Ventures, Silicon Valley Bank, Congruent Ventures, National Grid Partners, Powerhouse Ventures, Elemental Excelerator and FJ Labs; and BluWave-ai raised $4m from Sustainable Development Technology Canada and OCE.
 
Twenty-two investors participated in smart grid VC funding rounds this quarter with grid optimisation companies raising the most.
 
Five million dollars was raised in two debt-financing deals in Q1 2020, compared with $28m in one deal in Q4 2019. In Q1 2019, $1m was raised in one debt-financing deal.
 
Five M&A transactions were announced in Q1 2020 (none disclosed transaction amounts), compared with six undisclosed transactions in Q4 2019. There were ten M&A transactions (one disclosed) in Q1 2019.
 
EDF acquired a majority stake in Pod Point, an electric vehicle charge point provider.
 
Energy efficiency
Total corporate funding in energy efficiency came to $7m in three deals compared to $345m in two deals in Q4 2019 and $155m in two deals in Q1 2019.
 
VC funding raised by energy efficiency companies in Q1 2020 came to $7m in three deals compared to $30m in one deal in Q4 2019 and $100m in one deal in Q1 2019.
 
Eight investors participated in VC funding this quarter.
 
In Q1 2020, there were no debt and public market financing deals. By comparison, in Q4 2019, $315m was raised in one deal. In Q1 2019, there was also one deal for $55m.
 
In Q1 2020, there was one M&A transaction for $1.4bn, while in Q4 2019 there was no M&A transaction. In Q1 2019, there was one M&A transaction for $310m in the energy efficiency sector.
 
Battery storage
Total corporate funding including VC, debt and public market financing in battery storage came to $244m in nine deals compared to $635m in ten deals in Q4 2019. Funding was up 88% year-over-year compared with $130m in nine deals in Q1 2019.
 
Venture capital funding including private equity and corporate venture capital raised by battery storage companies in Q1 2020 came to $164m in six deals compared to $78m in seven deals in Q1 2019. Quarter-over-quarter funding was also higher compared to $126m in seven deals in Q4 2019.
 
The top VC funded battery storage companies this quarter were: Demand Power Group, which raised $71m from Star America; Highview Power raised $46m from Sumitomo Heavy Industries; Advano raised $19m from Mitsui Kinzoku SBI Material Innovation Fund, Future Shape, PeopleFund, Thiel Capital, DCVC and Y Combinator; ZincFive raised $13m from 40 North Ventures; and Twaice raised $12m from Creandum.
 
Fourteen investors participated in battery storage funding this quarter.
 
In Q1 2020, announced debt and public market financing for battery storage technologies was 54% higher year-on-year compared with $52m in two deals in Q1 2019.
 
One battery storage project fund of $140m was also announced in the quarter.
 
There were four M&A transactions involving battery storage companies in Q1 2020, with no transaction amounts disclosed. There were no M&A transactions in Q4 2019. There were four M&A transactions in Q1 2019, of which only one disclosed the transaction amount.
 
Blackstone Energy Partners acquired NRStor C&I, a subsidiary of NRStor, a developer of battery storage products.
 
There were four announced project M&A transactions in the battery storage category in Q1 2020 and all transaction amounts were undisclosed.