Funding for the battery storage, smart grid, and energy efficiency sectors rose by more than $10 billion last year compared to the previous 12 months.
Total corporate funding (including venture capital funding, public market, and debt financing) was up by 140%, with $19.5 billion invested in 2021 compared to $8.1 billion in the previous year.
The majority of the additional funding came from global VC (venture capital, private equity, and corporate venture capital) sectors, with the industry receiving $10.1 billion (290% rise) last year compared to $2.6 billion raised in 2020.
Lithium-ion-based battery technology companies received the most VC funding in 2021, with investments also pouring into solid-state, flow, thermal energy storage, liquid metal, solid-state, gravity storage, and metal-hydrogen batteries.
The findings were reported in industry analysts’ Mecom Capital’s ‘2021 Q4 and annual battery storage, smart grid, and efficiency funding and M&A report’.
The battery sector saw its biggest rise since 2014 with total corporate funding in the battery storage sector up 159%, with $17 billion in 101 deals— almost double year-on-year— during 2021.
VC funding for battery storage companies totalled $8.8 billion in 81 deals, compared to $1.6 billion raised in 32 deals in 2020.
Top funding deals
There were 24 merger and acquisitions (M&A) transactions in the battery storage category in 2021.
The biggest saw Sweden’s Northvolt collect $2.75 billion in private placement to drive its lithium-ion production capacity and R&D efforts.
The battery gigafactory developer has been steadily securing funding since 2019 when it secured $1 billion in a partnership with Volkswagen, and a €350 million ($391m) loan agreement from the European Investment Bank (EIB).
Last year’s capital raise brought Northvolt’s combined financing to more than $6.5 billion in equity and debt as it plans at least 150GWh of deployed annual production capacity in Europe by 2030.
China’s Svolt was the second biggest funding winner, collecting $2.58 billion in total through two funding rounds.
US lithium-ion battery firm Sila raised $590 million in its Series F funding round, and Taiwan’s ProLogium secured $326 million to continue developing its solid-state lithium ceramic battery technology.
Prologium’s funding was concluded last October, and will go toward expanding production capacity in Asia, Europe and the US between 2023 and 2025 to supply “major OEMs” with EV batteries.