Battery project funds have rocketed annually. Image: Mercom Capital Group.
Project funding for energy storage jumped to US$820 million in 2016 from just US$30 million in 2015, while Sonnen was revealed as the energy storage company to raise the most VC funding this year.
The latest quarterly report from Mercom Capital on financial activity in battery storage, smart grid and energy efficiency wraps up the results for the entirety of 2016. It found that during the year, energy storage companies raised US$820 million in project funding across seven deals, compared to US$30 million across three deals in 2015.
The majority of this project funding, US$625 million, was raised in the third quarter of the year and included Tabuchi America netting US$300 million for residential work and Advanced Microgrid Solutions with US$200 million of project financing from Macquarie Capital.
VC funding winners
Most significant among 11 mergers and acquisitions (M&A) in 2016 – coincidentally the same number as was seen in 2015 – was the US$1.1 billion acquisition of battery and system maker Saft by oil major Total. The company has also invested in the likes of Stem, Sunverge, Powerhive and Off-Grid Electric within the storage sector and SunPower in solar. Analysis firm Lux Research said in August that Total and other oil majors had significant funds available to invest and should try and get a foothold in the energy storage market.
Meanwhile, the number of VC investors in energy storage grew annually last year, to 62 from 57 in 2015. The overall figure invested fell very slightly, from US$397 million in 37 deals in 2015 to US$365 million in 38 deals in 2016. Total corporate funding, which included debt and public market financing, reached US$540 million in 2016, again a drop from the previous year when it saw US$676 million of corporate funding used.
Mercom Capital found that energy storage system companies raised US$146 million from VC investors, while lithium-ion battery companies raised US$79 million. Leaders among those VC fund recipients were:
Germany-headquartered residential and commercial energy storage and energy services company Sonnen, which raised US$85 million. Investors included GE Ventures, Envision Energy, Thomas Putter and Inven Capital.
Nexeon, a maker of lithium-ion batteries with silicon anodes, headquartered in the UK with a Japan office, raising US$43.3 million. Investors included Wacker Chemie, Invesco Perpetual and PUK Ventures.
The US’ Sunverge Energy, maker of mostly residential energy storage systems with virtual power plant capabilities, raised US$36.5 million. Investors included the Australian Renewable Energy Agency (ARENA), Australian utility AGL Energy and Total Energy Ventures International.
‘Saltwater’ battery maker Aquion with US$33 million. Investors were not disclosed for this company.
EOS Energy Storage, which makes a novel zinc-based grid-scale battery, raised US$23 million. Investors were not disclosed.