Ex-Tesla Leader Baglino Raises $140M for Next-Gen Grid

Heron, the energy technology startup founded by former Tesla powertrain and energy engineering VP Andrew Baglino, has successfully raised $140 million in Series B funding. The significant investment, notably led by Andreessen Horowitz’s American Dynamism Fund, is earmarked to accelerate the development and domestic manufacturing of advanced power semiconductors designed to modernize the outdated U.S. electricity grid and support the escalating power demands of AI data centers and renewable energy integration.

Key Points

• Heron secured $140 million in Series B funding, led by Andreessen Horowitz’s American Dynamism Fund.
• The company aims to replace century-old mechanical components in the grid with modern silicon-based power semiconductors.
• Heron's technology reduces power losses from grid to chip by a factor of four for data centers, simplifies build-outs, and offers a domestic supply chain alternative.
• Early customer deployments are anticipated this year, with revenue units expected in early 2027 and mass production by late 2027.
• The company is positioned to address the massive growth in AI power consumption and the expansion of renewable energy generation and storage in the U.S.

Strategic Funding for Grid Modernization

The substantial Series B round underscores growing investor confidence in Heron's mission to overhaul critical energy infrastructure. Andreessen Horowitz's American Dynamism Fund, known for backing companies focused on rebuilding American industry, brings more than just capital to Heron. Baglino highlighted the strategic synergy between Heron's goals and the fund's thesis.

"We're focused on building new technology and manufacturing in the United States, and that's really aligned with a16z's thesis through their American Dynamism Fund," stated Baglino. "We just found alignment on our future vision of how we can revolutionize the electricity sector in the U.S. together. They're an amazing firm. They've got resources across recruiting, in finance, in policy. They're great thought partners for us along with our existing investor team."

Heron's approach involves leveraging four decades of innovation in power semiconductors—a parallel development to Moore's Law improvements in computing transistors—and applying it directly to the core electricity grid. Current grid infrastructure still largely relies on mechanical devices invented over a century ago, a bottleneck Heron aims to eliminate.

Revolutionizing Data Center Power and Renewable Integration

Heron's technology, which substitutes "silicon and software" for "steel and oil," offers compelling benefits, particularly for energy-intensive AI data centers and the burgeoning renewable energy sector. For data center developers, Heron provides three key advantages:

• Alternative Domestic Supply Chain: Heron offers equipment manufactured domestically, bypassing the current two to three-year lead times for overseas-produced components and ensuring a more scalable supply.
• Simplified Infrastructure: The company's solutions can eliminate up to 70% of the traditional gear required to connect the grid to the chip, reducing labor needs and accelerating construction schedules.
• Increased Efficiency: Heron drastically cuts energy losses, reducing them by a factor of four from the grid to the chip. This means for the same power interconnection, data centers can produce significantly more computational output.

Beyond data centers, Heron's Heron Link technology is designed to address a broad market, converting DC to medium voltage AC, making it suitable for solar installations, battery storage, and other critical areas of the energy transition. Baglino, who previously led Tesla's energy business, emphasized the larger context of the electricity sector.

"Globally, we saw over half a terawatt, 500 gigawatts of solar installed last year, and that number isn't going to go down anytime soon," Baglino observed. "Really, the electricity sector is at a pivotal moment. We've got AI that needs way more power and electricity. Abundant renewable electricity can be a path to an all-sustainable, all-electric energy economy."

Outlook for a Sustainable Energy Future

Heron's strategic focus aligns with ambitious national energy goals, such as Elon Musk's vision for 100 gigawatts of solar in the United States. Baglino expressed confidence in achieving such targets, drawing on his extensive experience in scaling new technologies.

"I mean, of course," Baglino affirmed regarding the 100 GW solar goal. "If you put your mind to something, no matter how difficult it is, you can accomplish it. I can say that from two decades of experience scaling new technologies from nothing to, you know, millions of units. I think it's possible."

Heron plans to deploy its technology with early customers this year, with revenue-generating units expected to be in operation by early 2027. Mass production is slated to begin in late 2027, positioning the company to play a crucial role in enabling a more efficient, robust, and sustainable electricity grid capable of meeting the demands of the 21st century's technological advancements.