Overall, energy storage, smart grid and energy efficiency companies brought in US$433 million in venture capital in Q2 2016, according to the Texas-based consulting firm. Source: Flickr/Portland General
Mercom Capital Group’s latest report showed how energy storage companies brought in US$125 million in venture capital (VC) funding in Q2 2016, double that of the previous quarter.
Year-over-year funding this second quarter roughly matched last year’s Q2 output, which had US$126 million in 13 deals.
The funding was diverted into lithium-ion, sodium-based and lead-based batteries, energy storage systems, energy storage management software and thermal energy storage. Lithium-ion companies raised the most with US$51.3 million in three deals.
The top five storage companies were a mixed bag in terms of geography for Q2 2016. UK-based Nexeon, which manufactures silicon anode lithium-ion technology, secured this quarter’s VC deal at US$43.3 million from PUK Ventures, Imperial Innovations, Invesco Perpetual, Wacker Chemie and Woodford Investment Management. The manufacturer of the popular Aqueous Hybrid Ion (AHI) battery, Pittsburgh-based Aquion Energy came in second with US$33 million from undisclosed investors. Stem secured US$15 million in Series C VC funding from Mithril Capital Management. Greenvision Technologies, the Bangalore energy storage solution provider formerly Relicell bagged US$8 million from Vintage Energy & Resources. Silatronix also secured US$8 million from Hitachi Chemical and Inbata.
Top five storage companies for VC funding Q2 2016. Source: Mercom Capital Group
Participation in the funding was a significant increase on the last quarter; with 20 investors partaking this quarter compared to a mere eight in Q1 2016. However, this may not be too significant, as first quarters are often characteristically slower than other quarters.
Announced debt and public market financing for storage came to US$65 million in two deals in the second quarter of 2016, compared to US$28.5 million in two deals in Q1 2016. Plug Power and FuelCell Energy closed on a long-term loan facility for US$40 million and US$25 million respectively with Hercules Capital – a leading venture debt provider to innovative technology companies.
In terms of consolidation, there were four M&A transactions in Q2 2016 for storage, two of which disclosed financial details. In Q1 2016, there were two M&A transactions, of which neither disclosed transaction details. The largest M&A deal in the second quarter of 2016 was the US$1.1 billion acquisition of French battery manufacturer Saft by oil major Total.