VC Funding in Smart Grid Comes in at $81 Million in Q2 2014, Reports Mercom Capital Group

Battery/Storage companies raise $90 million; Energy Efficiency companies raise $113 million

Austin, TX - Mercom Capital Group, llc, a global clean energy communications and consulting firm, released its report on funding and mergers and acquisitions (M&A) activity for the smart grid sector for the second quarter of 2014.

Venture capital (VC) funding into smart grid companies came in at $81 million in 13 deals in Q2 2014, compared to $101 million in 21 deals in Q1 2014.

Chart: Smart Grid VC Funding by Quarter

The Top VC funded companies in Q2 2014 were led by ChargePoint, a provider of an open electric vehicle (EV) charging network, which raised $22.6 million. Sunverge Energy, a developer and manufacturer of distributed energy management systems, raised $15 million, and On-Ramp Wireless, a developer of wireless solutions for energy automation and M2M communications, received $13.6 million in an amended funding round. Gridco Systems, a smart power management technology company for utilities and industrial power consumers, raised $12 million, and rounding out the Top 5 was GeoDigital International, a provider of geospatial information solutions to the electric utility, which raised $5.8 million.

Chart: Smart Grid Top 5 Funded Companies

Twenty-five investors participated in VC funding rounds in Q2 2014. Siemens Venture Capital was the only investor participating in more than one deal.

Two Smart Charging companies (for Plug-in Hybrid Vehicles (PHEV)) and Vehicle to Grid (V2G) companies raised a combined $22.6 million and two Smart Grid Communication technology companies, raised $18.6 million. Grid Optimization companies raised a combined $17.8 million in two deals, while Distributed Generation and Storage companies raised $15.5 million also in two deals. Three Demand Response companies raised $3.5 million and two Data Analytics companies raised $2.54 million.

There were 16 Smart Grid M&A transactions (four disclosed) in Q2 2014 totaling $147 million. The top disclosed transactions were the $117 million acquisition of Power-One's Power Solutions business by Bel Fuse, an electronic product manufacturer for computers, networking and telecommunications, followed by the $23.5 million acquisition of the entire issued share capital of Utility Partnership Limited, a provider of end-to-end utility infrastructure, smart metering and energy management solutions in the UK, by Smart Metering Systems PLC, a provider of advanced smart metering solutions, the $3.86 million acquisition of BGlobal Metering, a company which designs, supplies, installs and manages smart energy metering systems, by Energy Assets Group, an independent provider of industrial and commercial gas metering services in the UK, and the $2.3 million acquisition of VCI Controls, a heating ventilation and air conditioning solutions provider, by SustainCo, a provider of infrastructure solutions and services.

Given the convergence of technologies, in 2014 Mercom has expanded its Smart Grid coverage to include Battery/Storage and Energy Efficiency (Efficiency) sectors.

Companies in the Battery/Storage space received $90 million in six deals, compared to $180 million in eight deals in Q1. There was one deal each in Sodium-ion, Flow Batteries, Zinc-air, Liquid Metal Battery, Supercapacitor and Thermochemical Energy Storage.

There were also five debt and public market financing deals in Battery/Storage totaling $157 million.

There were nine M&A transactions in Battery/Storage, of which only three transactions were disclosed totaling $24 million.

Energy Efficiency companies raised $113 million in 16 deals in Q2, compared to $156 million in 12 deals in Q1 2014. Home/Building/Data Center companies had four deals and Audit/Retrofit companies had three deals. There were two deals each in Software, Lighting, Temperature Control, and Energy Monitoring companies. There was one Efficiency Finance company which raised funding in Q2. There were 36 investors involved in Energy Efficiency funding deals in Q2.

There were 10 M&A transactions this quarter in the Efficiency category, of which only four had disclosed details totaling $409 million.

There were two Efficiency Initial Public Offerings in Q2 2014.

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