In today''s post, we''ll outline some of the top investors and VC firms that are fueling the growth of battery storage technologies.
The IEA says that global investment in battery energy storage reached almost USD 10 billion in 2021. It is led by grid-scale deployment, which represented more than 70% of total spending in 2021 and by lithium-ion batteries, which took more than 90% of total deployment in 2020 and 2021.
After solid growth in 2021 and 2022, battery energy storage investment is expected to hit a record high and approach USD 20 billion in 2023, based on the existing pipeline of projects and new capacity targets set by governments.
The Demand for Batteries is not going away any time soon
As the world moves towards clean energy sources and electric vehicles, the demand for efficient battery storage technologies is becoming more important than ever. Battery storage has the potential to revolutionize not just the energy sector, but also impact various industries such as transportation, telecommunications, and consumer electronics.
As a result, investors and venture capital firms are increasingly looking for opportunities in this space. Let''s look at the leaders:
Breakthrough Energy Ventures (BEV)
Founded by Bill Gates, Breakthrough Energy Ventures is a $1 billion fund that invests in innovative technologies that have the potential to significantly reduce greenhouse gas emissions. BEV has made several investments in battery storage companies, including Form Energy, QuantumScape, and Malta Inc. These companies are developing novel energy storage technologies, such as long-duration batteries and solid-state batteries, which promise to transform the way energy is stored and used.
Khosla Ventures
Khosla Ventures, led by Silicon Valley entrepreneur Vinod Khosla, has a long history of investing in clean energy technologies, including battery storage. Some of their notable investments include Sakti3, which is developing solid-state batteries, and Seeo, a company working on advanced lithium-polymer batteries. Khosla Ventures'' portfolio demonstrates a commitment to supporting innovative and disruptive technologies in the battery storage space.
Energy Impact Partners (EIP)
Energy Impact Partners is a global investment platform that aims to accelerate the energy transition by investing in cutting-edge technologies and innovative companies. EIP has invested in several battery storage companies, such as Stem, Inc., a leader in artificial intelligence-driven energy storage, and Highview Power, which is developing liquid air energy storage technology. EIP''s focus on fostering strategic partnerships in the energy sector makes it a significant player in the battery storage industry.
TotalEnergies Ventures
TotalEnergies Ventures is the venture capital arm of the French multinational energy company TotalEnergies. They invest in promising startups that are driving the energy transition, including those in the battery storage sector. One of their notable investments is in Ionic Materials, a company developing solid-state batteries with a focus on safety, energy density, and cost reduction. TotalEnergies Ventures'' backing provides a strong foundation for these startups to scale their innovative technologies.
G2VP is a venture capital firm that focuses on investing in sustainable industrial technologies. They have made investments in battery storage companies such as Sila Nanotechnologies, which is working on advanced materials to improve lithium-ion batteries, and Solid Power, a developer of all-solid-state batteries. G2VP''s experience in industrial technology investments allows them to support the growth and commercialization of battery storage innovations.
While not a venture capital firm itself, Northvolt, a leading European battery manufacturer, has launched its own investment arm, Northvolt Ventures. They focus on investing in startups and technology companies that can contribute to the development of more sustainable and cost-effective batteries. Northvolt Ventures has invested in companies like Cuberg, a startup developing advanced lithium-metal batteries for electric aviation and other applications.
Battery storage technologies are essential in the ongoing transition to a clean and sustainable energy future. As such, the interest and investments from venture capital firms and investors in this space are only expected to grow in the coming years.
The firms mentioned in this post are just a few examples of those betting on the future of battery storage and helping to bring innovative solutions to the market. Keep an eye on these investors and their portfolios, as they are shaping the future of energy storage and its applications.
Which VCs or investors are you aware of that are actively investing in this space?
But the more remarkable story has been in growth equity. In the past, private equity (PE) deals in the battery sector were sporadic. In the last year, though, they''ve blossomed, with growth equity firms sinking $13.4 billion into such areas as battery materials, manufacturers and recyclers.
PE''s presence reflects a shift in both the industry and the way investors view it. Batteries are normally considered a high-risk, high-reward investment; the sort of thing that venture capital is made for. But it''s not perfectly suited to VC, either — the R&D process for batteries can be exceptionally long, often extending beyond venture capital''s usual five- to 10-year timeline for collecting returns. And if the risks from battery startups are tough for VCs to stomach, then it''s an even harder pill for growth equity to swallow.
For one thing, there''s a lot of money in the economy that''s waiting to be invested, and that might be pushing some funds into territory they hadn''t previously explored. Such a move might make sense for VCs, who are used to scouting and assessing risky technology-based bets, but it doesn''t for growth equity.
"Too much money" might explain the size of some of these bets, but it doesn''t explain their existence. Rather, it''s more likely that VC and PE have sensed that the world is changing, and they''re adjusting their strategies accordingly.
Governments around the world have started to set end dates on fossil fuel vehicles. Countries across Europe began announcing bans in the late 2010s. Norway will end sales of fossil fuel cars and light commercial vehicles by 2025. The Netherlands, Ireland, Sweden and Slovenia will follow suit with passenger cars in 2030, as will Denmark and the U.K. in 2035 and France in 2040.
That wave inspired other countries to sign the Glasgow Declaration on Zero-Emission Cars and Vans in November 2021, which calls for ending sales of polluting passenger vehicles worldwide by 2040.
In the five years since the bans were first mooted, automakers have detected change in the wind. If the internal combustion engine was truly on the way out, they needed a plan and a way to differentiate themselves from the competition. One after another, OEMs began partnering with and investing serious money in battery companies.
GM, for example, has invested in SES, which is developing lithium-metal batteries. Ford has done the same with Solid Power, a solid-state startup that''s closing in on production. Volkswagen has taken a significant stake in solid-state company QuantumScape, and just this week, Porsche announced that it invested $100 million in Group14, which is developing silicon-augmented anodes that can help make batteries lighter and more powerful.
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