The Qatar Investment Authority is investing $125 million into energy storage systems integrator and power management tech developer, Fluence, in a deal that will value the company at over $1 billion.
The joint venture between the American independent power producer, AES Corp. and the German industrial conglomerate Siemens, was already worth $900 million prior to the transaction, according to Marek Wolek, the vice president of strategy and partnerships at Fluence.
With the new cash, Fluence will look to develop and acquire software and services that can expand the company’s offerings to its core clients among utilities and independent power project developers, Wolek said.
And it might not be too long before the company seeks additional liquidity from the public markets, Wolek said. He noted that the QIA is already backing the battery company QuantumScape, which was acquired by a special purpose acquisition company in late November and whose shares have been on a meteoric rise ever since.
After the QIA investment, AES and Siemens will remain majority shareholders. Each will hold a 44% stake in the company after the investment.
“We believe the global problem of climate change can only be tackled by leveraging the combined capabilities of technologists and investors from around the world,” said Manuel Perez Dubuc, Fluence’s chief executive officer, in a statement. “We see energy storage as the linchpin of a decarbonized grid and adding QIA to our international shareholder base will allow Fluence to innovate even faster and address the enormous global market for large-scale battery-based energy storage.”
One of six founding members of the One Planet Sovereign Wealth Fund Initiative, QIA is a multibillion dollar investment vehicle that has significant stores of capital to continue its support of climate tech companies like Fluence.
Fluence has already deployed roughly five gigawatts of energy storage and management systems to a wide array of customers, according to Wolek.
And while Wolek said Fluence sees itself and its energy storage business as a key component of the global decarbonization that needs to occur to combat climate change, electric storage isn’t the only technology that’s needed.
“It’s difficult looking at the energy market and looking at one technology and saying that one technology is going to solve everything,” said Wolek.
Rather, the company’s role is to ensure that the battery technology Fluence is deploying can be integrated with the other technologies required to provide industry and society with the power it needs, he said. “We want to absolutely be the experts on battery-based storage,” Wolek said. “At the same time we do invest quite a bit on the digital side to expand our dispatch capabilities beyond storage.”
That could mean teaming up with other energy suppliers (like developers of hydrogen fuel projects) in the future, he said.
“We want to master the energy piece on the battery side,” Wolek said of the company’s ultimate goal.
That goal puts the company on something of a collision course with the energy business being built by Elon Musk’s Tesla.
The billion-dollar valuation that Fluence currently enjoys and the $36.6 billion market cap that QuantumScape has goes some way toward explaining why Tesla can be considered to be a company worth over $650 billion.