First believers
Elisa Steccaglia, VC Principal @XAnge

The future of energy storage: where are VC investing and what’s next?

Global demand for Li-ion batteries is expected to soar over the next decade, with the number of GWh required increasing from about 700 GWh[1] in 2022 to around 4.7 TWh by 2030, a 7x times increase. EU and US will be the main scene of this radical growth (even though China will remain the world number 1 manufacturer), mainly driven by the adoption of EV, but also from energy efficiency and renewable energy.  

Macroeconomic context and main pain points

The battery industry will boost EU’s GDP and employment, thanks to R&D and new gigafactory openings[2] planned in the next years (ex. Verkor’s fist gigafactory in Dunkirk for 16 GWh, or Northvolt’s gigafactory in Germany for 60 GWh).

But we’ll also face new challenges, such as raw material and machinery shortage. In particular, lithium could be in extremely short supply, covering only 50% of the demand in 2030, according to McKinsey’s Battery 2030 outlook.

Also, we’ll have to deal with the environmental impact of the whole manufacturing chain, from mineral extraction to production and try to build a more sustainable industry. Battery recycling and reshoring of EU manufacturing may help on that.

Market segments and main players

Energy storage has been around for decades also in Europe, especially with pumped-storage hydropower. Outside grid-scale applications, chemical batteries represent the most important technology in terms of adoption, with NMC and FLP being the two dominant battery chemistries[3].

The value chain of chemical batteries has rapidly evolved in the last decade. While raw materials mining and refining remain the job of big industrial players, manufacturing has seen new players emerging in EU, for example Verkor, Northvolt and Britishvolt. Those new entrants are frontally competing with big industrials, such as Tesla[4], CATL, and ACC[5] (the consortium of Stellantis, TotalEnergies and Mercedes-Benz) on the European ground.

Also, in the last 5 years, new entrants have disrupted the battery analytics space and more recently the battery afterlife (recycling, refurbishing and reuse), creating a brand-new segment in the bottom right part of the mapping presented here above.

How have VC been involved in this industry so far?

Globally, VC investments in the battery space reached around 7bn$[6] in 2022, of which 6.1bn$ in the growth stage and the remaining 0.8bn$ in early-stage startups.

A lot of capital flew into capex intensive businesses, such as battery manufacturing companies, whereas software accounted only for 1% of the total amount invested.

In Europe, VCs and Infra funds have been active in supporting EV infrastructures, battery manufacturing, and software. We can recall few success stories:

  • EV charging stations: Electra in France raised 160m€ in 2022, a round led by Eurazeo, and Be.ev in UK raised 100M£ the same year with Octopus Energy;
  • Battery production: Verkor in France raised 250m€ in 2022 and it’s currently securing a 800m€ Series C which will bring the company to the unicorns’ realm (EQT, BPI, Demeter, EIB are among historical shareholders). Northvolt, Swedish unicorn, raised a total of 6.6bn€ in equity and convertibles (Siemens invested first in 2018, joined later by Volkswagen, EIB, Baillie Gifford and Goldman Sachs).
  • Software and Analytics: Twaice, in Germany is active in battery monitoring and analytics. The company raised a 30m$ Series B extension with US-Investor Coatue after a first Series B tranche of 26m$ the previous year.

What’s next?

Energy storage for mobility, B2C and industrial applications will keep on evolving. Under a venture capital perspective, what’s still hot in this industry? Here below some helpful hints.


  • Battery recycling: It is one of the hottest segments in the energy storage space. Recycling is a way to lower pressure on primary raw materials (lithium, cobalt, nickel) and improve sustainability. The value creation is more within companies that touch at the product to extract raw materials and sell them back to batteries’ manufacturers / automotive companies. We have been seeing new amazing startups addressing this topic, Tozero and Cylib are few examples. Nevertheless, few key questions remain open: 1/ margins and 2/ how is the tech better than what already exist for shredding and recycling.
  • Another interesting topic related to energy storage, is definitely energy optimization (efficiency, peak load capping, P2P electricity trading) in the B2B and B2C markets, a new wave that is coming.


  • New chemistries (solid state batteries, flow batteries, etc.): industrialization and time to market are very long and complex. Whereas it might be a strategic investment for industrials and public agencies, VCs’d better stay away from that.
  • Battery analytics: as an early-stage investor I consider that the market momentum is behind us, and someone has already taken advantage of it (Twaice and Accure are example of that). Therefore, unless a new tech is able to extract better quality of data vs. the existing BMS (ex. Entroview), I would focus on something else.


  • Software and marketplaces for end of life (recycling, refurbishment, reuse, etc). As the circular economy is building up in this space, we will need software and platforms to structure it. Today, the market is still too concentrated, the volumes and the value of recycling too low. So, it’s a bit too early in terms of timing, but the wave will come 🙂

[1] Lithium-ion battery demand forecast for 2030 | McKinsey

[2] Gigafactory investments – Batteries and Electric Vehicles (

[3] Trends in batteries – Global EV Outlook 2023 – Analysis – IEA

[4]Tesla wants to turn its Berlin factory into Europe’s biggest car plant | CNN Business

[5]Stellantis Electrification Transition in Full Swing with First ACC Battery Gigafactory Inaugurated in France | Stellantis

[6]Global venture capital investments in battery technology by stage and technology | Statista


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