Venture capitalists are always looking for the next "best deal," and many of them are finding these deals in technologies that deliver and manage electricity on the grid.
Mercon Capital Group's most recent "Battery Storage, Smart Grid, and Efficiency Funding and M&A Reports" (Q2 2017) provides information on companies involved in battery storage, smart grid, and energy efficiency technologies that have received venture capital (VC) funding.
Overall, the report noted, the first half of 2017 found VC funding totaling $1.03 billion globally, a 25 percent increase over the same period in 2016, which totaled $807 million. Interestingly, the lion's share of this increase, and the most VC funding in total, went to battery storage, with the other two technology groups actually suffering a decline in funding.
VC funding for battery storage more than doubled from $179 million in the first half of 2016 to $480 million in the first half of 2017. On a quarter-over-quarter basis, battery storage funding increased from $58 million for Q1 2017 to $422 million for Q2 2017. While most of the Q1 funding was for flow battery technology, Q2 funding was divided between flow batteries, whole energy storage systems, lithium batteries and zinc-air batteries.
VC funding for the smart grid sector actually declined slightly from $331 million in the first half of 2016 to $304 million in the first half of 2017. On a quarter-over-quarter basis, smart grid funding declined from $164 million for Q1 2017 to $139 million for Q2 2017.
VC funding for energy efficiency technology also declined from $297 million in the first half of 2016 to $242 million in the first half of 2017. The majority of that funding went to demand-response and energy efficient lighting technologies. On a quarter-over-quarter basis, energy efficiency technology funding declined from $213 million for Q1 2017 to $29 million for Q2 2017.