Foreign corporate capital in the energy storage area hailed a huge raise in the first half of 2024, rising to $15.4 billion, as the recent report by Mercom Capital informs. That increase more than doubled the amount invested in the same period of a year earlier as an acknowledgment of the rising relevance of the sector and the demand for solutions around the world.
A US-based research firm focusing on market intelligence in the segments of energy storage, smart grid technology, and solar energy, Mercom Capital, stated that the $15.4 billion raised in January-July was up 117% from the $7.1 billion secured in the first half of 2023. The figure noted record attention in the segment. The ‘Funding and M&A Report for Storage & Grid’ noted the investments have been under venture capital funding, debt financing, and public market financing.
H1 2024 total funding hit $2.4 billion across 48 deals, a 37 percent increase on the $3.8 billion invested across 43 deals in the same period in 2023. Again, the lion’s share of this funding went to lithium-ion battery companies, pointing to unflagging confidence in the technology’s future. Other strong categories for VC investment are battery recycling, metal hydrogen batteries, materials and component providers, and sodium-based battery companies.
Debt and public market financing of energy storage companies hit a combined $13 billion for 16 transactions in the first six months of 2024; that is a growth of 294% from the $3.3 billion over the same number of deals during the first six months of 2023. This strong uptick in these transactions gives ample evidence of just how much the energy storage marketplace is maturing and hopefully, in the eyes of many investors, how the energy storage industry is about to become a financially viable market as rising numbers of companies tap resources from debt and the public market to fuel their growth and innovation.
The report also elaborates on the M&A landscape of the energy storage sector. For example, there were 14 M&A deals in the first half of 2024, as opposed to eight deals for the same period last year. A rise in deals of M&A in the domain signals that innumerable firms are looking toward consolidation in the hope of securing better market share relative to new technology and geographies.
Besides its energy storage-focused concentration, the Mercom Capital report looked at the corporate funding trends within the smart grid. In comparison, funding for smart grid companies was down from the same period the year before. Smart grid corporate funding came to $1.6 billion in 36 deals for the first six months of 2024, an 11% drop from the first half of 2023, when $1.8 billion was raised in 33 deals. This could further indicate that investors are now shifting and putting their main attention on energy storage technologies, which they increasingly perceive as key to the renewable energy transition.
The research also shows some interesting funding activities in domestic energy storage, more so in India. One of the leaders in the sector, Maxvolt Energy, recently raised $1.5 million from angel investors. It has an upcoming launch for indigenous fast-charging lithium-ion batteries, targeting also the development of recycling plants. This investment is in support of advanced battery technologies, which will eventually find inroads in markets like India.
Indian startups like Battery Smart, Relux Electric, and Husk Power Systems are some of the large investments seen pouring into the smart grid sector in India. Battery Smart: $65 million, Relux Electric: $29.93 million, and Husk Power Systems: $4 million. The investments underscore increased interest in the smart grid technologies market in India, where a critical necessity lies for efficient energy distribution and management.
Altogether, the Mercom Capital report paints a picture of a financially healthy energy storage sector with bright growth prospects. Large corporate funding, especially with the rise in importance of venture capital and public market financing, illustrates the global move towards investing in energy transition. Problems and demand in successfully implementing various renewable energy sources should bring about growth in reliable and efficient energy storage, which likely increases investment and innovation in the sector.
For this reason, its competence to offer market intelligence and advisory services about emerging markets and strategic decision-making has made it a reputable source of information for industry players. The company’s latest report not only brings to the fore the financial trends in the energy storage and smart grid sectors but also provides valuable insights into the future direction of these critical industries.
Source: PTI