Heron Power Secures $140M to Scale Grid-Transforming Technology
▼ Summary
– Heron Power, founded by former Tesla executive Drew Baglino, raised $140 million to build gigawatts of solid-state transformers for data centers and the grid.
– The funding was driven by strong customer demand for over 40 gigawatts of its product, leading the startup to accelerate its plans despite a recent Series A round.
– Solid-state transformers are a newer, more compact technology that replaces bulky, century-old iron-core models, offering greater efficiency and solving key data center challenges like heat and space.
– The company’s Heron Link transformers can convert power for high-demand applications like Nvidia’s racks and include features like modular, swappable parts and integrated backup batteries.
– Heron Power will use the funding to build a factory aiming for 40-gigawatt annual production, targeting not only data centers but also the solar and grid-scale battery markets.
Heron Power, a startup founded by former Tesla executive Drew Baglino, has secured a substantial $140 million in funding to accelerate the manufacturing of its advanced solid-state transformers. This technology is designed to modernize power delivery for data centers and the broader electrical grid. The company’s rapid fundraising, following a $38 million Series A round just months prior, underscores the surging market demand. CEO Baglino noted the decision to raise capital was driven directly by customer interest, with commitments for over 40 gigawatts of solid-state transformers already on the table. “If our customers are leaning in, we need to lean in as well,” Baglino stated. “We gotta go faster.”
This funding round was spearheaded by Andreessen Horowitz’s American Dynamism Fund and Breakthrough Energy Ventures. Additional investors included Capricorn Investment Group, Energy Impact Partners, Gigascale Capital, and the Valor Atreides AI Fund. The swift capital influx highlights how the explosive growth of data centers is creating urgent demand for more efficient and powerful electrical infrastructure. Baglino’s extensive background at Tesla, where he led powertrain and energy teams, positions him well to manage this rapid scaling effort.
Solid-state transformers represent a significant leap from traditional iron-core models, which have dominated for over a century. While reliable and cheap, conventional transformers are large, generate considerable heat, and lack flexibility. The new solid-state versions, utilizing semiconductors, are not only more compact but also far more intelligent. They can seamlessly manage power from diverse sources like solar panels, wind farms, and battery storage systems. For data centers, this technology solves two critical issues: space constraints and thermal management.
Heron Power’s product, branded as Heron Link, is engineered to meet the specific needs of modern computing. It converts medium-voltage grid power directly to the 800-volt standard required by advanced computing racks, such as those from Nvidia. Each unit can handle 5 megawatts and is built with modular components. A key advantage is maintainability; if a module fails, it can be replaced in roughly ten minutes without taking the entire system offline. This modular design also incorporates specialized lithium-ion batteries that provide a 30-second bridge to backup power, potentially allowing data centers to eliminate traditional uninterruptible power supply (UPS) systems.
The economic and operational benefits are substantial. By consolidating multiple pieces of equipment into one intelligent unit, Heron Link can drastically simplify data center power architecture. Baglino claims the technology can remove up to 70% of the gear involved, leading to cost savings that he describes as “an order of magnitude” for some applications. While data centers currently make up about a third of the company’s business, the remaining focus is on integrating solid-state transformers with large-scale solar and battery storage projects, where their speed and flexibility offer major advantages.
The new capital will be directed toward constructing a high-volume manufacturing facility. The goal is an annual production capacity of 40 gigawatts of Heron Link transformers. This output would represent a significant portion of the global market, approximately 10% to 15% of annual production outside China, or about half the peak power demand of the entire state of Texas. The company plans to begin pilot production in early 2027, with a full ramp-up over the subsequent two years.
The market for grid modernization is becoming increasingly competitive, with many legacy transformers nearing the end of their operational life. Heron Power is not the only player developing this technology, but its recent funding success and Baglino’s proven experience in mass production provide a strong foundation. “We will push as hard as we can,” Baglino said, signaling the company’s intent to lead in transforming how electricity is managed and delivered for the digital age.
(Source: TechCrunch)
