Corporate Funding Trends in Energy Storage
Corporate funding for energy storage companies has seen a notable decline in the first nine months of 2025. According to data from Mercom Capital Group, the total corporate funding reached $11.2 billion across 85 deals. This represents a 36% year-over-year decrease compared to $17.6 billion in 83 deals during the same period in 2024.
Despite this overall reduction, venture capital (VC) funding for energy storage companies showed a slight increase. VC funding rose by 4% to $2.8 billion in 56 deals, compared to $2.7 billion in 61 deals during the first nine months of 2024. This growth highlights the continued interest from investors in the sector, even as corporate investment wanes.
Key Areas Receiving VC Funding
Materials and components providers emerged as the top recipients of VC funding, securing $1.1 billion in the first nine months of 2025. This segment is critical for the development and scaling of energy storage technologies, as it includes suppliers of essential materials such as electrolytes, electrodes, and other battery components.
Other well-funded categories include:
- Energy storage downstream companies: These firms focus on the integration and application of energy storage systems in various industries, such as utilities, transportation, and industrial sectors.
- Energy storage systems providers: Companies that develop and deploy complete energy storage solutions, including hardware, software, and system integration.
- Lithium-based and sodium-based battery companies: These firms are at the forefront of developing next-generation battery technologies, with lithium and sodium-based batteries being key players in the energy storage landscape.
M&A Activity in the Energy Storage Sector
Mergers and acquisitions (M&A) activity in the energy storage sector has also shown an upward trend. In the first nine months of 2025, there were 20 energy storage M&A transactions, up from 18 transactions in the same period in 2024. This indicates a growing consolidation within the industry, as companies seek to expand their capabilities and market presence through strategic partnerships and acquisitions.
In addition to M&A transactions, energy storage firms announced 45 project-related M&A deals in the first nine months of 2025, compared to 22 transactions in the same period in 2024. This increase suggests that companies are actively pursuing opportunities to acquire or merge with other entities to enhance their project portfolios and operational efficiencies.
Overview of the Report
Mercom Capital Group’s report provides a comprehensive overview of the energy storage and M&A landscape, covering 155 companies and investors. The findings highlight the dynamic nature of the sector, with both challenges and opportunities emerging in different areas. While corporate funding has declined, VC investment remains strong, particularly in key segments such as materials and components providers.
The report underscores the importance of continued innovation and strategic investment in the energy storage sector, especially as the global transition to renewable energy accelerates. With increasing demand for reliable and scalable energy storage solutions, the industry is poised for further growth and transformation in the coming years.