Corporate funding in battery storage in 2020 was up by 136% compared to 2019, Mercom says

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UK-based energy storage system integrator and project developer Zenobe Energy was the third biggest recipient of VC funding in the battery storage sector during 2020 overall, according to Mercom. Image: Zenobe Energy.

The amount of corporate funding coming into the global battery storage industry in 2020 was more than double the amount the previous year, with over US$6.5 billion raised last year compared to around US$2.8 billion in 2019.

The findings come from Mercom, which produces quarterly reports on corporate and venture capital (VC) funding activities in battery storage alongside the smart grid and energy efficiency sectors. The company also produces separate reports for the solar energy industry. The latest edition of the report rounds up disclosed activities which Mercom tracked over the whole of 2020.

Across those three reported sectors, US$8.1 billion in corporate funding was raised in 2020, which again compared to 2019’s figures was a huge upward swing compared to the US$3.8 billion in funding during 2019. As shown in the previous two editions of the report, the first half of last year saw a dramatic drop in funding into battery storage companies before the industry rebounded strongly in Q3 2020.

A large portion of this recovery was attributed to the US$600 million raised by Swedish lithium-ion battery design and manufacturing start-up Northvolt. Indeed, the whole year report named Northvolt as the top recipient of VC funding in the global sector. Entities including Goldman Sachs and Volkswagen are among investors in Northvolt.

Northvolt is constructing large multiple gigawatt-hour factories in Sweden and in Germany and intends to supply mainly the electric vehicle (EV) market but also the stationary energy storage market with batteries that it claimed will be among the most sustainably-made in the world.

While corporate funding rose significantly with US$6.6 billion raised across 54 deals in 2020 against US$2.8 billion in 42 deals in 2019, VC funding into battery storage dropped slightly however and according to Mercom totalled US$1.5 billion in 32 deals last year, compared to US$1.7 billion from the same number of deals in 2019.

Also in the top five after Northvolt are US company Quantum Scape, which has made headlines for its claimed advances in solid-state batteries, attracting US$200 million investment also from Volskwagen; UK energy storage developer and system integrator Zenobe Energy which raised US$198 million from infrastructure investment and asset management group Infracapital; Prologium, another solid-state lithium battery company which is based in Taiwan and raised US$100 million from Bank of China Group Investment and Chinese state-owned automotive manufacturer FAW Group; and Form Energy, the US-based long-duration energy storage startup which emerged from the labs at MIT, which raised US$76 million from investors including Bill Gates’ Breakthrough Energy Ventures and Macquarie Capital.

Mercom noted that overall, Breakthrough Energy Ventures was the top VC investor in battery storage during 2020. Meanwhile, lithium-ion battery companies raised the most VC money of any battery storage industry subset. The analysis firm also said that debt and public market financing for battery storage companies rose significantly from US$1.1 billion across 10 deals in 2019 to US$5 billion in 22 deals in 2020.

Once again Northvolt was involved in bumping up that share considerably, raising US$1.6 billion during the year in debt financing – as reported at the time of that deal, the company had raised over US$3 billion by then even before the US$600 million equity raise which came a little later in the year.

Watch 'What does it take to finance a gigafactory?' – an online panel discussion with some of the major players behind the funding of Northvolt's plans taken from our publisher Solar Media's Energy Storage Virtual Summit, hosted in late September 2020, here

Our publisher Solar Media is once again hosting the annual Energy Storage Summit for 2021, taking place in an exciting new format on 23-24 February and 2-3 March 2021. See the website for more details

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