Heron Power raises $140M to ramp production of grid-altering tech

Tim De Chant

Wed, February 18, 2026 at 10:00 PM GMT+9 3 min read

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

It’s a fast turnaround for the startup, which raised a $38 million Series A in May. Baglino said Heron Power didn’t need the money, but after customers expressed interest in buying more than 40 gigawatts of solid-state transformers, it decided to raise again.

“If our customers are leaning in, we need to lean in as well,” Baglino, who is CEO of Heron Power, told TechCrunch. “We gotta go faster.”

The speed at which Heron Power is raising shows just how data centers are driving demand for products that can rapidly deliver electricity to their servers. Baglino, who spent nearly two decades at Tesla and led the powertrain and energy groups, 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 transformers have been under development more than a decade, but only recently have matured to the point where they are ready to deploy in data centers and other large, energy-intensive facilities.

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

Solid-state transformers can also manage power intelligently, including from a range of electricity sources like wind, solar, and batteries, because they use semiconductors instead of passive metal.

The startup’s solid-state transformers, branded as Heron Link, can convert medium voltage electricity to the 800-volt power needed by Nvidia’s reference rack designs. They’re capable of handling 5 megawatts a piece, and each device contains tens of modules that do the power conversion. If one fails, it can be swapped out in about 10 minutes, far faster than it takes to replace a monolithic transformer.

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

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By eliminating pieces of equipment, solid-state transformers also eliminate several points of failure and reduce costs. “We can remove 70% of the gear involved,” Baglino said. “For some data center applications, it might be savings of an order of magnitude.”

Data centers are only about a third of Heron Power’s business currently, Baglino said. The remainder is split between solar power and grid-scale batteries, which benefit from solid-state transformers’ speed and flexibility.

Heron Power plans to use the new funding to build a factory capable of producing 40-gigawatts of Heron Link transformers annually. That’s about 10% to 15% of annual production outside of China (or about 5% to 10% of total global demand), the equivalent to half the peak power demand of the state of Texas.

Baglino said the company intends to begin pilot production in early 2027 before ramping production over the following two years.

Heron Power isn’t alone in developing solid-state transformers, and with many of the grid’s old transformers approaching replacement age, competition will be stiff. The startup’s new cash haul paired with Baglino’s experience scaling production could give it an advantage. “We will push as hard as we can,” he said.

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