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Web Exclusive | July 2017

Battery storage, smart grid, and efficiency companies raise $1 bn

Mercom Capital Group, llc, a global clean energy communications and consulting firm, released its report on funding and M&A activity for the battery storage, smart grid, and energy efficiency sectors for the second quarter and first half of 2017. In the first half of 2017 (1HFY17), $1.03 billion was raised by battery storage, smart grid, and efficiency companies compared to $807 million in 1HFY16.

Graph 1


Battery Storage

VC funding (including private equity and corporate venture capital) for battery storage companies jumped in Q2 2017 to $422 million in 10 deals compared to $58 million in eight deals in Q1 2017 due to very large funding deal. YoY funding was higher compared to $125 million raised in Q2 2016 from 10 deals. In 1HFY17, $480 million was raised in 18 deals compared to the $179 raised in 20 deals in 1HFY16.

The top VC funded battery storage companies in Q2 2017 were: Microvast Power, which raised $400 million from CITIC Securities, CDH Investment, National Venture Capital, and others; Vionx Energy received $12.75; and Moixa Technology raised $3.2 million in funding from the Greater Manchester Combined Authority, Tokyo Electric Power Company (TEPCO), and First Imagine! Ventures.

Eleven investors participated in funding in Q2 2017 with lithium-based battery companies raising the most.
There were seven debt and public market financing deals in battery storage in Q2 2017 totalling $107 million compared to $22 million in two deals in Q1 2017. In 1HFY17, there was $129 million raised in nine deals compared to three deals bringing in $69 million in 1HFY16.

There was one battery storage project fund in 1HFY17 for $152 million compared to three deals raising $195 million in 1H 2016. Battery Storage project funding in 1HFY17 totalled $5 million in two deals compared to no deals in 1HFY16.
There were three M&A transactions involving battery storage companies in Q2 2017. In Q1 2017, there was one M&A transaction. In the first half of 2017, there were four transactions (one disclosed) compared to six transactions in 1HFY16 (two disclosed).

Table 1


Smart Grid

VC funding for smart grid companies in Q2 2017 came to $139 million in eight deals compared to $164 million in 14 deals in Q1 2017. In a YoY comparison, $222 million was raised from 15 deals in Q2 2016. $304 million was raised in 22 deals in 1HFY17 compared to $331 million raised in 29 deals in 1HFY16.

The top VC funded smart grid companies included: Actility, which secured $75 million from Creadev, Bosch, Inmarsat, Idinvest, Bpifrance, Ginko Ventures, KPN, Orange Digital Ventures, Swisscom, and Foxconn; ChargePoint raised $43 million from Siemens; FreeWire Technologies received $7.6 million; and Enervalis secured $4.8 million from LRM, Nuhma, and ABB.

Seventeen investors participated in smart grid VC funding rounds in Q2 2017 with Demand Response companies raising the most. There was one debt and public market financing in Q2 2017 totalling $9 million compared to no deals in Q1 2017. In 1HFY17, $9 million was raised in one deal compared to $217 million in three deals in 1HFY16.
There were six smart grid M&A transactions in Q2 2017 compared to seven transactions in Q1 2017. In the first half of 2017, there were 13 transactions (three disclosed) compared to five transactions (two disclosed) in 1HFY16.

Efficiency
VC funding into energy efficiency technology companies fell significantly to $29 million in six deals in Q2 2017 compared to the $213 million in 14 deals in Q1 2017 and $86 million in nine deals in Q2 2016. $242 million was raised in 20 deals in 1HFY17 compared to $297 million raised in 23 deals in 1HFY16.

The top efficiency VC deals included: $15 million raised by CIMCON Lighting from Energy Impact Partners; the $5 million raised by Tendril Networks; OptiWatti raised $4 million from Taaleri Kiertotalous and Butterfly Ventures; and Illumitex raised $4 million from WP Global Partners and NEA.

Six investors participated in VC funding in Q2 2017. Within the sector, efficiency lighting companies brought in the most funding. Debt and public market financing rebounded to $1.4 billion in six deals in Q2 2017 compared to $301 million in three deals in Q1 2017. In 1HFY17, there was $1.7 billion raised in nine deals compared to $2 billion raised in the same number of deals in 1HFY16.

There was one M&A transaction in the efficiency sector in Q2 2017 compared to four in Q1 2017. In the 1HFY17, there were five transactions (two disclosed) compared to 10 transactions in 1HFY16 (four disclosed).

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