October 23rd, 2020 by Zachary Shahan
People who don’t follow cleantech, or individual cleantech industries, often think that solar, wind, and batteries are sort of small, niche markets. Actually, these have become large markets in recent years and are often the quickest growing markets. Similarly, related smart grid and energy efficiency companies are booming.
Need some proof? Well, proof other than Tesla? Mercom Capital has released its 3rd quarter report on investments in the battery storage, smart grid, and energy efficiency sectors that shows billions of dollars flowing into these cleantech portions of the energy market.
- $3.2 billion went into battery storage, smart grid, and energy efficiency companies in the 3rd quarter, up from $1.2 billion in the 2nd quarter.
- That’s a 777% increase compared to Q3 2019, when companies in these sectors raised $365 million.
- $4.7 billion was raised in the first three quarters of 2020 in the battery storage, smart grid, and energy efficiency companies, which is up from $2.7 billion in the same period in 2019.
Battery Storage Funding
Batteries led the table this time, with Northvolt and QuantumScape being the top two money raisers, together accounting for $800 million in funding. In the first three quarters of the year, the battery storage industry pulled in $3.5 billion of funding across 35 deals, approximately two-thirds of the combined markets’ 3rd quarter results. Further, the $3.5 billion in funding was a 62% increase over $2.2 billion across 32 companies raised in the first three quarters of 2019.
“VC Funding in Q3 2020 was spread across five categories: Lithium-based Batteries, Sodium-based Batteries, Metal-Hydrogen Batteries, Energy Storage Systems, and Thermal Energy Storage,” Mercom Capital writes.
“The Top 5 VC funding deals in 9M 2020 were: Northvolt’s raise of $600 million, QuantumScape, which raised $200 million, ProLogium Technology raised $100 million, Demand Power Group secured $71 million, and Highview Power raised $46 million. A total of 28 VC investors participated in Battery Storage funding in Q3 2020.”
We’ve covered QuantumScape several times in the past 5 years. Though, there’s not been much to report on the previously stealth startup before its stealthy entry onto the public markets. We’re eager to learn more again as the secretive battery company reveals more and more.
Northvolt wasn’t even alive in 2015. It was founded in 2016 and has been grabbing headlines and growing its brand strongly since. Our first coverage of the company seems to have been in March 2017. A few months ago, and a lot more of the history behind Northvolt and insight into its plans via a podcast interview with CEO Peter Carlsson. You can listen to that in three parts here:
Smart Grid Funding
Here’s the short update on “smart grid,” which includes electric vehicle charging in Mercom’s classification:
“Smart Grid VC funding in Q3 2020 was $368 million in 11 deals compared to $194 million in 14 deals in Q2 2020. In a YoY comparison, funding in Q3 2019 was $39 million in six deals. $643 million was raised in 32 deals in 9M 2020, 231% higher compared to $194 million raised in 28 deals in 9M 2019.
“VC Funding in Q3 2020 was spread across four Smart Grid technologies: Smart Charging, Distributed Generation and Integration, Smart Grid (SG) Communications, and Data Analytics.”
The biggest winner is a company we know extremely well and probably 90% or more of American EV drivers know — ChargePoint. ChargePoint raised $127 million for it. But Star Charge was right on its heels at $125 million.
Energy Efficiency Funding
We end with one of the broad solutions with the most effectiveness but the least sex appeal: energy efficiency. No one in this industry pulled in money like ChargePoint or QuantumScape have done, but several companies did raise millions of dollars.
“VC funding for Energy Efficiency technology companies increased in Q3 2020, with $48 million raised in four deals compared to $40 million raised in four deals in Q2 2020. In a YoY comparison, funding in Q3 2019 was $61 million in three deals. $95 million was raised in 11 deals in 9M 2020, 65% lower compared to $268 million raised in eight deals in 9M 2019. …
“The Top VC funding deals in 9M 2020 were: Palmetto raised $29 million, Juganu raised $18 million, BrainBox AI secured $12 million, Virtual Power Systems raised $12 million, and SmartAC.com raised $10 million.”
What will happen in the 4th quarter? Will these sectors continue to grow at a fast clip? Will they reach new heights? Will the funding collapse a bit? What are your thoughts?
Image by Kyle Field/CleanTechnica
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