Heron Power raises $140 million to boost production of grid-changing technology

Heron Power, founded by former Tesla CEO Drew Baglino, announced Wednesday that it has raised $140 million to build gigawatts worth of solid-state inverters for data centers and the grid.

It’s a quick turnaround for the startup, resulting in a raise $38 million Series A in May. Baglino said Heron’s power It didn’t need the money, but after customers expressed interest in purchasing more than 40 gigawatts of solid-state inverters, it decided to raise the amount again.

“If our customers are inclined, we need to adopt as well,” Baglino, who is CEO of Heron Power, told TechCrunch. “We have to go faster.”

The speed at which Heron Power is ramping up shows how data centers are driving demand for products that can quickly deliver electricity to their servers. Baglino, who spent nearly two decades at Tesla and led powertrains and powertrains, is no stranger to moving quickly.

The Series B round was led by Andreessen Horowitz’s American Dynamism Fund and Breakthrough Energy Ventures with participation from Capricorn Investment Group, Energy Impact Partners, Gigascale Capital, and Valor Atreides AI Fund.

Solid-state converters have been in development for more than a decade, but have only recently matured to the point that they are ready for deployment in data centers and other large, energy-intensive facilities.

The new technology seeks to replace older iron-core transformers, which have existed in essentially the same form for more than a century. Iron-core transformers are cheap and efficient, but they are bulky and generate a lot of heat. Solid-state switches are smaller and can also be more efficient by replacing multiple pieces of equipment, solving two of the biggest challenges data center developers face.

Solid-state inverters can also intelligently manage power, including from a range of electricity sources such as wind, solar and batteries, because they use semiconductors rather than passive metals.

The startup’s solid-state inverters, branded Heron Link, can convert medium-voltage electricity into the 800-volt power needed by Nvidia’s reference rack designs. They are capable of handling 5 megawatts apiece, and each device contains dozens of modules that convert the power. If one of these transformers fails, it can be replaced in about 10 minutes, which is much faster than it would take to replace a monolithic transformer.

Each Heron Link also contains specialized lithium-ion batteries that can quickly discharge to provide 30 seconds of power to ease the transition to backup power sources such as grid-scale batteries, allowing data centers to eliminate uninterruptible power supplies.

By eliminating pieces of equipment, solid-state converters also eliminate many points of failure and reduce costs. “We can remove 70% of the equipment involved,” Baglino said. “For some data center applications, that could be a significant savings.”

Data centers currently represent about a third of Heron Power’s business, Baglino said. The rest is split between grid-scale solar and batteries, which benefit from the speed and flexibility of solid-state inverters.

Heron Power plans to use the new funding to build a plant capable of producing 40 gigawatts of Heron Link inverters annually. This equates to about 10% to 15% of annual production outside China (or about 5% to 10% of total global demand), equivalent to half of Texas’ peak energy demand.

Baglino said the company intends to begin trial production in early 2027 before ramping up production over the next two years.

Heron Power is not alone in developing solid-state inverters, and with many of the older inverters in the network approaching replacement life, competition will be intense. The startup’s new cash, combined with Baglino’s experience in scaling production, could give it an advantage. He added: “We will push as hard as we can.”