$2.75B Northvolt deal highlights record capital year for battery storage so far

If you want to follow the money in the energy sector, the trail might lead you straight to a battery storage project, according to venture capital data so far this year.

A new funding, mergers and acquisition report by Mercom Capital counted some $11.4 billion raised in corporate funding for battery storage in 2021’s first nine months. The total capital represents 73 deals and is an all-time 9-month record for such transactions, Mercom says.

Overall, nearly $14 billion was raised to fund or acquire startups in the battery storage, smart grid, and energy efficiency sectors, according to Mercom.

A rendering shows the Form Energy battery system planned near Cambridge, Minnesota. Credit: Form Energy / Courtesy

Venture capital primarily flowed into several mega investment deals: Northvolt, which raised $2.75 billion; Sila Nanotechnologies, which raised $590 million; Form Energy and Nexamp, which secured $240 million each, and Ambri, which raised $144 million. A total of 223 VC investors participated in Battery Storage funding in the first three quarters of 2021.

Venture capital and private equity firms accounted for slightly more than half of the overall investment in those companies, more than doubling their segment’s 9-month funding from the previous year. Yet it might be slowing down, as most of this year’s capital flow to battery storage happened earlier, with the third quarter total of $1.6 billion being a significant drop from $3.6 billion in 2021’s second quarter, according to Mercom Capital.

In addition to independent deals, scores of utilities are planning or deploying large-scale battery storage projects over this year and 2022. Those include Georgia Power, Florida Power & Light, Vistra Energy, Dominion, Salt River Project, Portland General Electric and more.

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