Fluence, one of many largest suppliers of large-scale vitality storage for the grid, just isn’t a startup. It was shaped as a three way partnership between two huge world vitality corporations, energy producer AES and German vitality tools large Siemens.
As such, Fluence by no means wanted to chase exterior funding. But it surely capped off 2020 with what seems to be the most important single funding in a pure-play grid storage firm: a $125 million non-public placement from the Qatar Funding Authority, a sovereign wealth fund.
That is larger than SoftBank’s 2019 funding of $110 million in block-stacking storage startup Power Vault, or storage software program firm Stem’s practically $110 million Sequence D in 2018. Firms have raised bigger sums as challenge finance autos to help the buildout of battery fleets, and several other electrical automobile battery corporations have raised extra in direct fairness funding. However the newest Fluence deal units a brand new bar for company funding into corporations devoted to grid batteries.
The deal additionally confers one thing that the corporate’s preliminary backers couldn’t: an impartial market valuation. The $125 million, in change for a 12 % stake, values Fluence at greater than $1 billion, a uncommon achievement for the vitality storage sector (AES and Siemens every retain 44 % possession).
“They did plenty of due diligence on the enterprise and bought comfy round every part now we have to supply,” stated Marek Wolek, Fluence VP for technique and partnerships, in an interview this week. “This hopefully helps the route we’re on to be a number one participant driving innovation.”
This deal alone may presage the next quantity of funding in grid storage corporations to come back this yr. However President-elect Joe Biden received after campaigning on formidable local weather motion, and Tuesday’s elections in Georgia gave Democrats management of the Senate, creating extra room for legislative motion on clear vitality deployment. For storage and grid edge corporations, there’s by no means been a extra auspicious time to boost cash.
Fluence had a product roadmap based mostly on the capital it had raised from its two preliminary backers. However the firm noticed a gap to maneuver quicker with new capital, stated Wolek, who beforehand labored on strategic partnerships for AES and helped set up Fluence. Increasing the investor base additionally creates optionality for future fundraising.
The brand new money will go primarily to technological innovation, Wolek stated. Fluence doesn’t manufacture batteries, however packages them into full energy vegetation with energy electronics, security tools, vitality administration programs and digital controls. Fluence just lately expanded its digital choices with when it acquired startup AMS, which constructed algorithmic buying and selling software program to extend energy plant income in wholesale markets.
“Lots of the longer term innovation, which can deliver storage as a extra central a part of the general grid, is going on on the digital aspect, the place we’re simply scratching the floor,” Wolek famous.
Fluence launched a extra compact and modular storage product final yr, designed to hurry up set up and enhance security in comparison with an earlier product technology, which was concerned in a 2019 fireplace in Arizona.
The QIA non-public placement comes after a number of different storage corporations, like Stem and zinc battery startup Eos Power Storage, have opted for public markets through particular function acquisition corporations (SPACs). Fluence might head to public markets ultimately, however that will be as much as shareholders, Wolek famous.
“Our job is to develop the enterprise as quick as we are able to and hopefully as broad as we are able to, so we are able to make investments way more capital in it,” he stated.
Investor sentiment does appear to be warming as much as the ability sector, simply as long-discussed developments towards decarbonization and decentralization begin to decide up velocity.
“There’s a broad perception within the funding group that the vitality grid is on the fringe of disruption,” Wolek stated. “That’s being mirrored within the numbers being raised.”