- Venture capital investment in battery storage doubled in 2019, growing to $1.7 billion, according to the market research firm Mercom Capital Group.
- Startups developing lithium-ion (Li-ion) batteries for electric vehicles attracted the majority of that funding. Experts say Li-ion will continue to dominate the market for years to come.
- Alternatives to Li-ion designed for grid-scale storage also won big. "There's a big bet that long-duration energy storage is the future," an analyst at Wood Mackenzie said.
- Business Insider compiled the top nine biggest battery deals in 2019, based on data from Mercom Capital Group.
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Batteries haven't always been a good investment. In fact, in an interview with Business Insider last year, a prominent clean tech angel investor said, flat out, "don't invest in batteries."
The list of battery bankruptcies is indeed long. It includes names like A123, Axion, Alevo, Camborne Energy Storage, and LightSail Energy - though some of these companies have since bounced back.
"Send me a list of people who've made money in batteries," Tom Blum, the angel investor, said. "The simplest advice is: Run away."
But venture capitalists seem to be ignoring that advice. According to the market research firm Mercom Capital Group, VC funding for batteries has quadrupled since 2014, growing to a stunning $1.7 billion in 2019.
That's compared to other clean-energy sectors like smart grid and energy efficiency, which only raised about $300 million each in 2019, the group says.
Experts say there are two forces fueling the battery boom: The explosive growth of electric vehicles (EVs) and the rising concentration of renewable energy sources on the grid.
The vast majority of EVs run on Li-ion batteries, so it's no surprise that startups developing these technologies attracted the lion's share of investment, or $1.4 billion of the VC funding for storage in 2019.
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But a batch of battery companies developing alternatives to Li-ion with their eyes set on grid-scale storage also scored multimillion-dollar deals last year.
These companies are hoping to solve an imminent problem: As more renewable energy is added to the grid, we'll need big batteries to kick in when there's a lull in power - like during a stretch of cloudy days in a region that relies on solar energy. And at that demand, Li-ion is expensive, at least for now.
"There's a big bet that long-duration energy storage is the future," Dan Finn-Foley, the head of energy storage at the research firm Wood Mackenzie, said. "Money is really flying into the space."
So, where is it going? Read on for the top nine biggest deals in battery storage last year, listed from smallest to largest, based on data provided by Mercom Capital Group.