Dec 4 (Reuters) - U.S. artificial intelligence-driven energy storage company Stem Inc said on Friday it has agreed to go public by merging with blank-check acquisition company Star Peak Energy Transition Corp at a valuation of roughly $1.35 billion. The merger with Star Peak will give Stem an estimated $608 million in gross proceeds to invest in its burgeoning smart grid technology which helps support green forms of energy. “The balance sheet strength will support more credit requirements and really allow us to convert larger projects in the pipeline,” Stem Chief Executive John Carrington said in an interview with Reuters. Reuters reported on Thursday the two companies were nearing a deal. Stem was founded in 2009 and provides an energy storage system which allows users to automatically switch energy usage between battery and grid power, based on an artificial intelligence platform dubbed “Athena”. Its backers include Activate Capital, Constellation Technology Ventures and RWE Supply & Trading. Batteries are used to solve the issue of the intermittent nature of renewable energy sources such as wind and solar. Pairing big batteries with renewable energy projects improves reliability without creating climate-changing emissions. “From our persecutive the problem here is climate change and a revolutionized grid is a big part of the way you deal with climate change,” Star Peak Chairman Mike Morgan said in an interview. Stem expects to generate revenue of $147 million in 2021 and to be EBITDA positive in 2022, a measure of profitability for a high-growth company’s underlying business. Star Peak is a special purpose acquisition company (SPAC). A SPAC is a shell company which raises funds in an initial public offering (IPO) with the aim of acquiring a private company, which then becomes public as result of the merger. Star Peak raised around $350 million in an IPO in August on the New York Stock Exchange (NYSE) to buy a business focused on the transition to newer sources of energy. Star Peak’s Morgan is also the lead director of U.S. pipeline operator Kinder Morgan Inc and is on the board of residential solar firm Sunnova Energy. SPACs have emerged as a quick route to the stock market for companies, particularly auto technology startups, that are seeking to eschew the lengthy IPO process. Upon completion of the deal, which is expected in the first quarter of 2021, Stem’s shares would trade on NYSE under the symbol “STEM.” Reporting by Joshua Franklin in Miami; Editing by Stephen Coates and Susan Fenton