Global energy storage funding drops 36% in 2025, M&A activity rises

Global corporate funding in the energy storage sector fell 36% year-over-year to $11.2 billion across 85 deals in the first nine months of 2025, down from $17.6 billion in 2024, according to Mercom Capital Group.

Venture capital (VC) investment rose slightly to $2.8 billion across 56 deals, led by $1.1 billion in funding for materials and components firms developing next-generation battery technologies. Other top-funded segments included energy storage integration, system providers, and lithium- and sodium-based battery developers.

Debt and public market financing declined sharply by 44%, totaling $8.4 billion across 29 deals, reflecting tighter capital markets and policy uncertainty in major economies.

M&A activity strengthened despite the funding slowdown, with 20 corporate deals and 45 project-level transactions reported in 2025, signaling continued consolidation and investor interest in operational storage assets.

Analysts expect 2026 investment to focus on high-efficiency chemistries, long-duration storage, and battery recycling technologies as governments and industries accelerate net-zero strategies.