Dive Brief:
- The shift towards a new utility grid, where distributed generation enables reliability beyond the older, centralized generation model, is attracting significant amounts of capital and expanding rapidly, new research reports.
- Market analysis released last week from GTM Research showed companies enabling the transition raised $1.2 billion from private equity firms and venture capitalists in 2014. GTM has since revised the estimate up to $1.3 billion.
- While generally keeping pace with the overall market between 2010 and 2013, GTM believes year-over-year deal-count growth for grid-edge investments outperformed overall U.S. venture capital growth.
Dive Insight:
Greentech Media Research has released new research illustrating the transformation from a centralized to a distributed electricity system. The report shows the transition is being fueled by activity at the edge of the grid, and according to the firm companies enabling this transition raised $1.3 billion from private equity firms and venture capitalists in 2014. That ranks ahead of grid-edge investments in 2013 and 2014, but down from a high of $1.4 billion in 2011.
"In 2014, investments became more diversified as an all-time high of 82 grid-edge vendors received funding, topping a previous record of 70 vendors," said report author Andrew Mulherkar.
Analysis shows energy storage was a clear leader last year, attracting more deals and funding than both of the runner-up segments of demand-side management and data analytics. The report also tracks deals across advanced metering infrastructure, distribution automation, communications, grid support, network operations, and utility investment in solar photovoltaics.
M&A activity gradually increased from 2010 to 2012 as consolidation occurred among vendors in more mature markets like AMI, demand response, and distribution automation, GTM noted in the report.
