- Venture capital interest in grid edge technologies is growing, evidenced in a new report from Mercom Capital Group that found $472 million raised in the first quarter of this year by companies focused on battery storage, smart grid technologies, and energy efficiency.
- Battery storage funding showed the most significant rise: Almost $300 million was raised in a dozen deals, compared to $150 million in five deals during the last quarter of 2017.
- Stem was the darling of venture capitalists in the first quarter, raising $80 million in a Series D funding round. Ionic Materials and Ecobee each secured more than $60 million in funding.
Venture capital funding rose in all three grid edge categories, quarter over quarter, but the jump in energy storage was by far the most significant.
Venture capital funding raised by battery storage companies, including funding from private equity and corporate venture capital, was $299 million in the first quarter, almost double the $151 million raised in the final months of 2017. And on a year-over-year basis, Q1 this year was "significantly higher" than the $58 million raised in Q1 2017, said Mercom.
Smart grid companies saw a 79% rise in venture funding, compared with last year's fourth quarter. Companies raised $75 million in seven deals this Q1, compared to $42 million in nine deals in Q4 2017. In a yearly comparison, funding fell from $164 million in Q1 2017.
Energy efficiency companies raised $98 million in the first quarter, largely steady compared with $95 million in Q4'17, though there were only four deals compared with 10. Year-over-year, there was $213 million raised in 14 deals in the first quarter of last year.
Mercom said 15 investors participated in battery storage in the first quarter, with energy storage system companies raising the most. There were also four mergers and acquisitions deals involving battery companies, but the firm said details were not disclosed.
Smart grid companies receiving VC funding include Bidgely ($27 million); Husk Power Sysrems ($20 million); and Mnubo ($16.5 million).
In efficiency, Ecobee raised $61 million, Carbon Lighthouse raised $27 million, and Petros PACE Finance received $10 million from former Major League Baseball player Alex Rodriguez and his investment firm A-ROD.