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Mercom: Upstream battery industry got lion’s share of VC funding in H1 2019

Image: Mercom Capital Group.

Northvolt, the consortium looking to establish gigawatt-scale lithium battery manufacturing in Europe and Sila Nanotechnologies, a battery technology startup, were the recipients of the highest sums of venture capital (VC) funding in the first half of 2019 in the battery storage sector.

According to Mercom Capital Group’s latest report on battery storage, smart grid and energy efficiency funding and mergers and acquisitions activity, global VC funding across the three spaces leapt up to US$1.7 billion for H1 2019, compared to around US$843 million in the equivalent period of last year.

A significant chunk of that 102% year-on-year increase is taken by Northvolt, which Mercom identified as having raised US$1 billion. Energy-Storage.news reported on the involvement of the Merchant Banking Division of Goldman Sachs in that deal, along with tie-ups with automakers including VW and BMW. The Swedish consortium could be building as much as 56GWh of manufacturing capacity across two big sites. 

Ranked second in VC funded deals, raising US$170 million in a Series E, was Sila Nanotechnologies. Although not directly targeting the stationary energy storage market as yet, the company produces silicon-dominant anodes which can be put into existing battery-making processes.

According to a recent appearance on the Watt it Takes founders series podcasts by CEO Gene Berdichevsky, the company is focusing on getting large numbers of small deployments in devices such as bluetooth headphones and other consumer electronics as a means of building scale. However, much like 24M with its recently piloted 'semisolid' battery technology, the company claims that its anodes could be suitable for many lithium battery applications and types, enabling batteries with higher volumetric density.

In third place was Romeo Power, a US-based battery module and pack manufacturer which Mercom reported to have raised US$88.6 million from undisclosed investors in the period. The company inaugurated its first factory in late 2017, aiming to produce 1GWh of packs by the end of that year on the back of US$100 million of investment.

Romeo Power claims improved energy density over rivals and boasts a leadership team that includes a former SpaceX battery engineer, although details of the technology have not been forthcoming. In May, the company announced a joint venture with vehicle technology provider BorgWarner, which took a 20% stake in California-headquartered Romeo Power.

Fourth and fifth place in the VC-funding rankings were taken by downstream industry companies. In fourth place was UK-headquartered Zenobe Energy, a developer which netted significant investment from Japanese companies Jera and Tokyo Electric Power Company (TEPCO), one of the country’s biggest utilities. Zenobe received US$32.3 million in funding, highest-ranked of the non-battery manufacture related recipients of VC funds in the first half of this year. The company has involved itself in a range of projects, from grid-scale storage to commercial and industrial, recently also getting involved in electric buses

Livguard, an energy solutions company based in India, providing equipment ranging from inverters and solar panels to automotive batteries and currently a range of lead-acid batteries for use with solar systems received a similar amount (US$32 million). The company raised funds from NCubate Capital, an investment firm backing entrepreneurs and ChrysCapital, an “India focused investment firm” which has around US$4 billion of assets under management.

Overall, corporate funding for battery storage leapt to US$1.9 billion in 22 deals in the first six months of this year, Mercom found, compared to US$689 across 36 deals in total in H1 2018. This bucked a wider trend in the three sectors reported. Total corporate funding across batteries, energy efficiency and smart grid fell slightly from US$2.4 billion across 61deals in H1 2018 to US$2.3 billion from 51 deals in H1 2019.

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