Funding For Battery Technology Companies Exploded In 2020

Last fall Swedish lithium-ion battery maker Northvolt announced that it had raised $600 million in equity to invest in capacity expansion, research and development, and large-scale recycling.

The capital raise included institutional investors Baillie Gifford, Baron Capital Group, Bridford Investments Limited, Norrsken VC & PCS Holding together with private investors Cristina Stenbeck and Daniel Ek. It was joined by current Northvolt shareholders Goldman Sachs, IMAS Foundation, Scania, and Volkswagen AG.

The $600 million represented a substantial capital raise for a company that isn’t exactly a household name in the U.S., but Northvolt CEO Peter Carlsson had previously made clear the company’s intent to upend Chinese domination of the European market: “There’s a pretty significant export flow of used batteries to China, and that’s stupid. It’s important to keep these flows within Europe.”

Northvolt made the biggest deal in the battery space in 2020, but it was a huge year overall for the rapidly-growing sector. Mercom Capital Group, global communications and research and consulting firm focused on cleantech, recently released its Q4 and Annual 2020 Funding and M&A report for the battery storage, smart grid, and energy efficiency sectors.

Some of the key findings from the report include:

  • Battery storage, smart grid, and energy efficiency companies brought in $8.1 billion in corporate funding in 2020, compared to $3.8 billion in 2019.
  • Corporate funding in battery storage was up 136% with $6.6 billion in 54 deals in 2020.
  • Global VC [venture capital] funding for battery storage, smart grid, and efficiency companies in 2020 was 12% higher with $2.6 billion. compared to $2.3 billion raised in 2019.

The report noted that lithium-ion based battery technology companies received the most VC funding in 2020, with $649 million. But other storage categories also received funding, including solid-state batteries, energy storage downstream, energy storage systems, and flow batteries.

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