Clean energy is on a hot streak with investors.
VC funding in the sector has remained historically high since its 2021 peak, with deal value hitting $3.5 billion across 197 deals in Q1 2024, according to PitchBook’s Q1 2024 Clean Energy Report. More investors are flocking to the category. In recent days, Breakthrough Energy Ventures, the Bill Gates-backed firm, revealed it has raised $839 million toward its third flagship fund as climate-focused investments gain steady traction.
Startups are feeling the excitement, too, with several securing large fundraising rounds in recent months. Zap Energy, a fusion power startup, raised $130 million of new funding in July, according to new filings. The battery manufacturer EnerVenue raised $308 million as it targets $515 million in new funding, also according to new filings.
Driving the excitement and growth in clean energy is the grid-infrastructure segment. With startups developing new power generation and storage solutions alongside management and monitoring technologies, the segment has consistently generated the most capital within the sector. As the global transition toward cleaner energy continues, the segment is poised for more growth.
The market map below explores the grid infrastructure segment, highlighting the startups investors are bullish on to lead the green transition. Click on the teal title for more details.
To go deeper, read our Q1 2024 Clean Energy Report. PitchBook customers can also explore the full market map with data on more than 2,400 companies.
PitchBook analysts have broken out grid infrastructure into three categories:
Battery storage: Companies that create, optimize and do other work in the field of large grid-scale batteries across many different chemistries like Li-ion, redox flow, and metal-air.
Nonbattery storage: Startups that offer energy storage through non-chemical means, such as pumped water and kinetic flywheels.
Grid analytics and management: Technologies and services that monitor grids and assist in managing electrical loads.
VC dealmaking in the clean energy category has been stagnant for the last five quarters, though it remains near historically high levels after its quarterly peak in Q4 2021. In 2022, $20.4 billion was deployed across 863 deals. And while 2023 marked a decline in deal value despite an uptick in deal count, the sector saw $16.5 billion invested across 867 deals.
In Q1, the grid infrastructure segment raised $1.07 billion from 82 deals, a decrease from the previous quarter’s total of $1.3 billion generated from 107 deals.
Several notable deals are buoying the space, however. Sila, a battery materials startup, raised a $375 million Series G in June led by Sutter Hill Ventures. Thermal battery developer Antora Energy raised a $150 million Series B led by Decarbonization Partners in February.
Exits within the greater clean energy sector have been fallen off in what is a difficult IPO environment. In Q1 only $100 million was generated across 10 transactions. There are indications activity is starting to pick up. In June, solar farm infrastructure startup Ojjo was acquired for $119 million by Nextracker. The electric mobility startup Powerhive was acquired by Veteran Capital for $35 million in June.
Featured image by Julia Midkiff/PitchBook News
