The latest quarterly report from Mercom Capital Group tracks companies, venture capital and M&A activities in the overseas energy storage industry, as well as smart grid and energy efficiency companies. It found that the industry received $22 billion in corporate funds from 92 transactions between January and September, exceeding the total of $17 billion in 2021.

As of June this year, Mercom has tracked $15.8 billion in corporate financing, including open market and debt financing. This means that the industry raised $6.2 billion between July and September alone.

Although the thriving corporate financing may reflect the maturity of the market, on the contrary, the amount of venture capital in the industry has significantly decreased year-on-year. Mercom found that venture capital firms invested $4 billion in the first nine months, a 44% decrease from the same period in 2021.

In Mercom's financing ranking, Eolian, the investor and owner operator of energy storage assets in the United States, ranks first. In April, it completed a financing of $925 million from financial institutions such as Banco Santander, Mitsubishi UFJ Financial Group (MUFG), and Mizuho. The company belongs to the investment portfolio of Global Impact Partners, a sustainable infrastructure and influence investor.

The material company Group 14, which is developing next-generation lithium battery silicon negative electrode technology, ranked second and raised $400 million in Series C financing. Investors include Porsche and OMERS Capital Markets. Meanwhile, the company is also one of the recent recipients of US government funding to support the US battery industry chain, receiving a commitment of $100 million from the Biden Harris administration.

The third company is Hydrostor, an advanced compressed air energy storage company in Canada, which claims that its proprietary technology has higher cycle efficiency and less heat loss compared to traditional compressed air technology. At the beginning of this year, Hydrostor raised $250 million in conditional investment commitments from Goldman Sachs. A few days ago, the Australian Renewable Energy Agency (ARENA) promised to support the company's planned 1.6GWh project in New South Wales with AUD 45 million (USD 28.42 million) in funding.

Several major deals have also been announced since September, with the most important being Form Energy, a iron air battery startup aimed at commercializing the technology that claims to provide low-cost energy storage for several days using rich and easily applicable materials. In early October, Form Energy raised $450 million in Series E financing, bringing the total investment raised so far to $800 million. Investors include Arcelor Mittal, the Canadian Pension Plan Investment Board, and Bill Gates' Breakthrough Energy Venture Capital.

In October, a new company focused on battery energy storage in the United States, Nightpeak Energy, announced support of at least $200 million. The company was established by former executives and directors of Recurrent Energy, a subsidiary of Canadian Solar, a US solar photovoltaic and energy storage developer.

The legislation of the US Inflation Reduction Act (IRA) and Europe's REPowerEU policy strategy will be the main driving factors for a significant increase in energy storage deployment in the coming years, so we expect to see more transactions completed by the end of the year.