Mercom: Battery storage dominated funding in grid edge technologies in H1 2017

Dive Brief:

Venture capital funding for grid edge companies rose in the first half of 2017 to $1.03 billion, well above the $807 million companies attracted in the first half of 2016, according to a new report from Mercom Capital Group. However, funding for energy efficiency and smart grid technology companies declined.
A chunk of the first half increase comes from one "very large funding deal," the report finds, making the numbers more difficult to parse. Almost a dozen investors participated in storage funding in the second quarter of last year, with lithium-ion battery companies raising most.
The top VC-funded storage company in the second quarter of 2017 was Microvast Power, which raised $400 million from several investors including CITIC Securities, CDH Investment and National Venture Capital.

Dive Insight:

Mercom Capital's report is a mixed bag for grid edge companies, but one trend is clear. Comparing the first half of 2016 to 2017, the number of venture capital funding deals declined in each of the categories examined.

Investment in battery storage rose significantly, while smart grid and efficiency VC funding fell slightly.

Funding for battery storage companies jumped in the second quarter of last year, to $422 million in 10 deals, compared to $58 million in eight deals in the first quarter of the year, "due to very large funding deal." In the first half of 2017, $480 million was raised in 18 deals compared to $179 million raised in 20 deals in the first half of 2016.

While Microvast Power pulled $400 million from several investors, funding drops off precipitously from that amount: Vionx Energy received almost $13 million, and Moixa Technology raised $3.2 million.

Funding for smart grid companies fell in the first half of 2017 to $304 million, compared with $331 million the previous year. The top VC funded smart grid companies included Actility, which secured $75 million, and ChargePoint, which raised $43 million from Siemens. Funding for energy efficiency tech companies fell "significantly" to $29 million in six deals during the second quarter last year. During the same period in 2016, funding for such companies totaled $86 million.

More than $240 million was raised in 20 deals in the first half of 2017 compared to almost $300 million raised in 23 deals in the first half of 2016. Six investors participated in VC funding in the second quarter last year, and Mercom said efficiency lighting companies brought in the most funding.