Corp funding for energy storage drops to USD 19bn in 2023

Energy storage corporate funding 2019-2023. Image by: Mercom Capital Group.

Corporate funding in the global energy storage segment came to USD 19 billion (EUR 17.48bn) in 2023, marking a 28% year-on-year decline, according to the latest data by Mercom Capital Group.

The report contains data collected from 193 companies and investors and tracks corporate funding, including venture capital (VC) funding and mergers and acquisitions (M&A). The statistics show that the total funding raised in the past year came from 120 transactions, of which 26 with a combined value of USD 3.7 billion were registered in the closing quarter.

"Energy storage companies saw their highest VC funding in 2023, largely thanks to the Inflation Reduction Act's Investment Tax Credit and other incentives like manufacturing credits for battery components,” said Raj Prabhu, CEO of Mercom Capital Group. He pointed out, however, that the positive trend comes in contrast to the weakening M&A activity, which deteriorated due to high asset valuations, higher interest rates and investor caution.

Last year’s VC and private equity (PE) funding for battery storage companies reached an all-time high of USD 9.2 billion from in 86 deals, rising 59% in annual terms. The bulk of the financing was secured by lithium-ion battery technology companies. The most prominent transaction on the list is British Zenobe Energy’s raising of USD 1.1 billion from KKR & Co Inc and existing shareholder Infracapital, followed by a USD-1-billion raise by battery recycling startup Redwood Materials aimed at growing its capacity. Some of the other big deals include a USD-905-million series C funding round of French Verkor and another one of Chinese stationary battery maker Hithium worth USD 622 million.

Announced debt and public market financing for energy storage companies in 2023 amounted to USD 9.8 billion in 34 deals.

A total of 15 energy storage companies and 28 battery projects totalling 8.7 GW changed their ownership in the past year.

(USD 1.0 = EUR 0.920)

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