EarthGrid

EarthGrid

About this raise

EarthGrid, with a valuation of $80.4 million, is raising funds on NetCapital. The company has designed its tunnel-boring technology to create an underground network of tunnels. EarthGrid’s technology aims to create a network of underground utility tunnels bored by a plasma tunnel boring robot, making the process faster, more efficient, and less costly. The company works on Boring and Drilling as a Simple Service (B.A.D.A.S.S.) and Build Own Operate & Maintain (B.O.O.M.) model to eliminate fossil fuels and offer ultra-high-speed Internet, sustainable clean water, transportation, and delivery services. Troy Helming and Scott Lane founded EarthGrid in September 2016. The current crowdfunding campaign has a minimum target of $10,004.50 and a maximum target of $2.9 million. The campaign proceeds will be used for capital equipment, state CPCN filings and license acquisitions, integrated seismic prediction development and startup costs, and wholly-owned line construction.

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Investment Overview

Invested this round: $1,239,194

Deal Terms

Total Commitments ($USD)

Platform
Netcapital
Start Date
05/23/2024
Close Date
10/15/2024
Min. Goal
$10,005
Max Goal
$2,996,400
Min. Investment

$99

Security Type

Equity - Common

Series

Series C

SEC Filing Type

RegCF    Open SEC Filing

Price Per Share

$5.50

Pre-Money Valuation

$80,412,096

Company & Team

Company

Year Founded
2016
Industry
Energy, Power, & Natural Resources
Tech Sector
Cleantech
Distribution Model
B2B
Margin
Medium
Capital Intensity
High
Location
Richmond, California
Business Type
Growth
Company Website
Visit Website

Team

Employees
28
Prior Founder Exits?
Yes
Founder Name
Troy Helming
Title
CEO
Founder Name
Scott Lane
Title
Chief Operations Officer

Financials

as of Fiscal Year 2023
 Revenue
$391,255
 Monthly Burn
$350,000
 Runway
20 months

Summary Profit and Loss Statement

FY 2023 FY 2022

Revenue

$391,255

$1,711

COGS

$0

$0

Tax

$0

$0

 

 

Net Income

$-12,883,069

$-6,558,646

Summary Balance Sheet

FY 2023 FY 2022

Cash

$7,688,621

$397,097

Accounts Receivable

$301,623

$0

Total Assets

$1,861,515

$1,861,515

Short-Term Debt

$26,664

$74,309

Long-Term Debt

$21,474,836

$5,625,730

Total Liabilities

$21,501,500

$5,700,039

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Synopsis

One of the biggest crises the United States faces is invisible to most of us.

As citizens switch to heat pumps, electric cars, and electric stoves, and as the economy grows with data centers requiring more electricity, the grid is also trying to become greener by adding renewable energy sources and storage. Investors are backing these changes, and new projects could double the current grid capacity.

But there’s a problem: utilities are too slow to connect these projects to the grid, with new electricity farms now waiting up to three years to be connected. This delay leads to the abandonment of some of these projects.

That’s where EarthGrid’s technology comes in. The company's plasma tunnel-boring technology uses plasma to cut through rock and soil, significantly reducing the time and cost involved in tunnel construction. Offering a 100 times more efficient and 10 times cheaper method, EarthGrid can alleviate bottlenecks in infrastructure development and support the transition to clean energy and modern utilities.

The company can also bury current electricity lines, preventing disasters like fires in California or power cuts during storms in Texas. It can even dig tunnels for other applications such as water connections or internet cables.

EarthGrid operates under the business models of Boring and Drilling as a Simple Service (B.A.D.A.S.S.), which provides payments upon completing contracts, and Build Own Operate & Maintain (B.O.O.M.), which gives the company recurring revenues over decades. The primary customers of EarthGrid include utility companies, municipalities, and private entities looking to develop infrastructure for renewable energy, ultra-high-speed internet, clean water, wastewater management, transportation, and delivery services.

By solving one of America’s largest problems, offering its services to both public and private entities, and setting up both transactional and recurring business models, EarthGrid is set up for success. KingsCrowd Capital has already invested $20,000 in EarthGrid’s current round.

Next Section: Price

Price

EarthGrid’s valuation may initially seem high, but it is fully justified.

In this funding round, the company is offering Common Equity at a valuation of $80.4 million pre-money, with a price per share set at $5.50.

Investing in common equity has its pros and cons. One advantage is that common equity holders typically have voting rights, allowing them to influence company decisions. However, common equity is generally subordinate to preferred equity regarding claims on assets and earnings. This means that in liquidation, preferred equity holders are paid before common equity holders.

For EarthGrid to provide a 10X return to investors without accounting for dilution, the company's valuation would need to reach approximately $804 million. Achieving this level of return would likely require significant milestones such as successfully scaling its plasma tunnel-boring technology, securing major contracts with private companies, utility companies, and municipalities, and expanding its market presence in the U.S. renewable energy sector. Such growth is achievable since EarthGrid has already signed contracts that could generate 8-digit revenues in 2025 and more in the following years. Additionally, the company signed a joint venture worth $7 billion, which could make the company a unicorn.

EarthGrid has 82 pending patents and 70 published, representing highly valuable intellectual property. It has also already raised about $50 million. Given that the company's contracts will soon generate millions of dollars in revenues, EarthGrid is fairly valued for investors.

 

Next Section: Market

Market

EarthGrid is addressing a large and pressing challenge and has a large addressable market.

The company’s main clients will fall within the U.S. renewable energy sector, which is experiencing significant growth driven by increasing demand for sustainable energy solutions and infrastructure improvements. The market size for renewable energy in the U.S. is estimated at $121.7 billion, with an annual growth rate of 15.7%. This robust growth is propelled by government incentives, technological advancements, and a societal shift towards reducing carbon emissions.

One key market driver is the backlog in the development of transmission infrastructure. As of 2022, nearly 2 million megawatts of solar, wind, and storage capacity were awaiting connection to the electrical grid due to insufficient transmission infrastructure and lengthy permitting processes. This bottleneck results in delays for clean energy projects, creating a significant opportunity for EarthGrid's tunnel-boring technology, which aims to expedite the construction of underground utility tunnels. By addressing this pain point, EarthGrid can facilitate faster deployment of renewable energy projects, positively impacting its growth potential.

Additionally, various grid operators and governmental bodies actively seek solutions to improve interconnection processes. Initiatives like the Department of Energy's Interconnection Innovation Exchange (i2X) aim to enhance collaboration and transparency in interconnection. These efforts align with EarthGrid's goal of offering a more efficient tunnel-boring process, potentially increasing the company's market adoption and accelerating its growth.

EarthGrid's product can target a broad market segment, particularly focusing on utility companies, municipalities, and private entities developing infrastructure for renewable energy, high-speed internet, and essential utilities. The company's plasma tunnel boring technology offers a distinct advantage by providing a faster, more cost-effective, and environmentally friendly alternative to traditional tunnel boring methods. This positions EarthGrid to capture a significant market share, especially given the high barriers to entry and the technological complexities involved.

While the overall market trends are favorable, EarthGrid must navigate regulatory challenges and ensure it can scale its operations effectively to meet demand. The positive market drivers and the company's targeted approach and unique technological solution indicate substantial growth potential within the expanding U.S. renewable energy market.

Next Section: Team

Team

EarthGrid's leadership team comprises experienced professionals with extensive backgrounds in renewable energy, telecommunications, and engineering, which are crucial for the company's ambitious goals.

Troy Helming, the CEO and Founder, brings decades of experience in the clean energy industry. He has a proven track record of founding and exiting six companies that have generated significant economic impact, including two unicorns. His clean energy and innovation expertise drive EarthGrid's mission to develop sustainable infrastructure solutions.

Scott Lane, the COO and Co-Founder, has a background in managing large-scale projects and operational planning; Scott's skills are essential for overseeing EarthGrid's day-to-day operations and ensuring the successful implementation of its tunnel-boring technology. His previous roles at Centauri Energy, Parsons Engineering, and EDF Renewable Energy highlight his capability to manage complex projects and teams.

The CTO, Jeff Dzado, has a strong engineering background, with a B.S. in Computer Engineering from Brigham Young University—Idaho. Jeff has worked on flight controls and estimation systems for UAVs, designed and optimized operations for Amazon Fulfillment centers, and contributed to factory automation and controls at Tesla. His technical expertise is vital for developing and refining EarthGrid's plasma tunnel-boring robot.

The team's combined experience aligns well with EarthGrid's objectives of revolutionizing the tunnel-boring industry and providing efficient, sustainable infrastructure solutions. Troy Helming's vision and industry connections, Scott Lane's operational expertise, and Jeff Dzado's technical skills form a robust foundation for achieving the company's goals.

Next Section: Differentiation

Differentiation

EarthGrid is one of only two companies in the tunnel-boring and drilling industry that uses plasma to dig tunnels.

Its most direct competitor, GA Drilling, focuses on vertical drilling for geothermal applications. Therefore, the company isn't a threat since it seeks customers in a different market. EarthGrid's approach is more diversified, targeting utility tunnels for renewable energy, high-speed internet, and essential utilities. This broader application potentially gives EarthGrid an edge in market reach and versatility.

The Robbins Company is another significant player in the tunnel-boring industry, known for its traditional mechanical and hard rock tunnel-boring machines. Robbins has a well-established market presence and extensive experience in large-scale infrastructure projects. However, EarthGrid's plasma tunnel boring technology aims to provide a faster and more cost-effective alternative, which could appeal to customers looking for innovative solutions to expedite their projects. Earth Grid's solution is ten times cheaper and a hundred times faster than traditional tunnel-digging methods, giving it an edge over competitors.

Next Section: Performance

Performance

EarthGrid’s traction in online deals has been among the most impressive recently, which will help it achieve its efforts to revolutionize the tunnel-boring industry.

The company has raised $50 million to date, including from VC funds such as Monozukuri Ventures and VU Venture Partners, which have been instrumental in advancing its technology and securing key contracts. This includes $13 million invested by the founder from 2016 to 2021, $7 million in a pre-seed round in 2022, and $30 million in a seed round in 2023. These funding rounds were notably oversubscribed, indicating strong investor interest and confidence in EarthGrid's potential.

EarthGrid reported an annual revenue of $391,000 in 2023, a significant increase from $1,700 in 2022. Despite this growth, the company also reported a net income loss of $12.9 million, up from $6.6 million the previous year. This underscores the high costs of developing and scaling its technology and operations. Still, this loss is necessary for the company to move forward and will surely pay off soon.

EarthGrid recently reduced its monthly burn rate to $320,000, with cash and cash equivalents totaling $1.2 million at the end of the most recent fiscal year. Institutional investors already committed more funding, which should give EarthGrid a comfortable runway.

EarthGrid has also made notable progress in intellectual property and market penetration. The company holds 152 patent claims across eight patents, with 82 published and 70 pending. This strong IP portfolio provides a competitive edge and protects its technological innovations.

Additionally, EarthGrid has secured State Utility Certificates of Public Convenience and Necessity (CPCNs) in 46 states, covering 97% of the U.S. population and GDP. These certifications are crucial for the company's ability to operate and expand its services nationwide, significantly lowering its regulatory risk.

In March 2024, EarthGrid completed a 2.5-meter (8’ tall) test tunnel, removing approximately 40 cubic meters of hard rock in about 30 hours with one torch. The company boasts a $4 billion customer pipeline, including significant traction with the US Air Force. Additionally, a $7 billion+ joint venture was established, with an MOU signed in March 2023, the joint venture closed in September 2023, board approval from the JV partner received in March 2024, and two lender term sheets received for EarthGrid’s 30% share.

EarthGrid has expanded its telco utility approvals from 24 states in fall 2022 to 46 states as of May 2024, covering approximately 97% of the US GDP and population via CPCNs. The company received an indicative offer for a $150 million loan from an institutional lender, valuing its IP at $300-600 million with over 1,000 trade secrets. Current projects in development, totaling $310 million, are located in Texas, California, Nevada, and other states. These include three interconnection applications, ROW confirmation with CPCN & FERC, signed PPAs, and pending customer contracts.

Overall, EarthGrid's performance reflects significant achievements in funding, revenue growth, technological development, and market penetration. However, the company must manage its financial resources effectively and secure additional capital to sustain its growth trajectory and achieve long-term success. The company’s multiple projects demonstrate strong market demand and product-market fit.

Next Section: Risk

Risk

EarthGrid faces several specific risks that potential investors should consider. 

The company operates in a capital-intensive industry, requiring significant investments in equipment, technology development, and regulatory compliance. This high capital intensity increases financial risk, especially if future funding rounds do not meet expectations or if the market conditions change unfavorably. The company's burn rate of over $320k per month further underscores the need for consistent capital infusion to sustain operations and growth.

Another risk factor is delays in achieving regulatory approvals and licenses. EarthGrid operates in a highly regulated industry with stringent tunnel construction and utility infrastructure requirements. Delays or difficulties obtaining the necessary permits and certifications could hinder project timelines and increase operational costs.

Furthermore, EarthGrid's business model involves long sales cycles and extended timeframes to scale production and distribution. Convincing private companies, municipalities, and utility companies to adopt new tunnel-boring technology can be lengthy, and the actual construction and deployment of tunnels require significant time and resources. This long time to market can strain the company's financial resources and delay revenue generation.

Lastly, EarthGrid is positioned early to market with its plasma tunnel boring technology. While this offers a potential competitive advantage, it also involves adoption risk. Potential customers may hesitate to adopt new technology over established methods, requiring EarthGrid to invest heavily in market education and trust-building efforts.

Next Section: Bullish Outlook

Bullish Outlook

Earth Grid's new tunnel boring plasma technology is entering a market in need of its technology: the U.S. renewable energy market, estimated at $121.7 billion with an annual growth rate of 15.7%. Today, clean energy farms must wait three years or more to access transmission infrastructure development due to the incapacity of the utility to answer the exponentially growing demand. Earth Grid can accelerate the development of new energy projects in a 100x faster, 10x cheaper, and environmentally friendly alternative. The company has already signed contracts worth hundreds of millions of dollars, and its product-market fit shows that it has the potential to become a unicorn.

EarthGrid is ready to start working on its new contracts. The company already has 82 approved patents and 70 pending.  It has secured State Utility Certificates of Public Convenience and Necessity (CPCNs) in 45 states, covering 96% of the U.S. population and 97% of the GDP. These certifications are crucial for the company's ability to operate and expand its services nationwide. EarthGrid has raised $50 million, with funding rounds being significantly oversubscribed. The company successfully bored a 2 km tunnel last year and generated a revenue of $391k.

The company's CEO, Troy Helming, has already exited several companies in the green energy space, including two companies valued at more than $1 billion. His experience in growing and exiting startups in the clean energy space is an asset: not only does he have enough market knowledge to identify the most pressing issue in the industry, but he has also experienced the ups and downs of building a highly successful company.

Next Section: Bearish Outlook

Bearish Outlook

Several factors add risk to an investment in EarthGrid. First, the company is burning $320k monthly and will need more funding to keep operating at this pace. Although it has already raised $50 million from VC funds such as Monozukuri Ventures and VU Venture Partners, as well as from angel groups and strategic investors, raising more capital is crucial for the company. Investors should note that having more institutional investors back the startup is critical for its future.

EarthGrid operates in a capital and time-intensive industry. To fulfill its numerous signed and potential contracts, the company will need to borrow millions from banks to build dozens of torch machines, which can take up to a year and a half to construct. While these contracts may help secure the necessary loans, it will still take at least a year before EarthGrid begins operating on its larger contracts and generating significant revenue.

Next Section: Executive Summary

Executive Summary

EarthGrid develops plasma tunnel-boring technology for an underground tunnel network, serving utility companies, municipalities, and private infrastructure developers. The company aims to offer a 100x faster, 10x cheaper, and environmentally friendly alternative to traditional tunnel-boring methods.

Operating in the $121.7 billion U.S. renewable energy market with a growth rate of 15.7%, EarthGrid benefits from infrastructure development backlogs and governmental initiatives. The company has raised $50 million to date, with $391k in revenue in 2023, thanks to its fulfillment of a contract for a 2 km tunnel. Earth Grid is capital intensive and reported a net loss of $12.9 million in 2023 and a reduced current monthly burn rate of more than $320k, holding $1.2 million in cash and expecting another $1.5 million from institutional investors.

The company boasts a $4 billion customer pipeline, including significant traction with the US Air Force. Additionally, a $7 billion+ joint venture was established and signed in September 2023

EarthGrid's plasma technology differentiates it from competitors like GA Drilling, The Boring Company, and The Robbins Company. Its strong intellectual property and broad application potential target utility companies, municipalities, and private entities. The leadership team, led by CEO Troy Helming, COO Scott Lane, and CTO Jeff Dzado, has extensive experience in renewable energy, telecommunications, and engineering. Helming exited 6 companies, some in the energy space, including 2 companies valued at more than $1 billion.

Adoption risk exists due to the novel technology, and time and capital risk is due to the high cost of its machines. Despite these risks, EarthGrid's strong market potential and innovative technology offer a compelling investment opportunity that could provide significant returns to investors, though investors must weigh the high valuation and financial challenges carefully.

Why We Invested

There’s nothing more exciting for an investor than finding a company building a must-have product. EarthGrid’s tunnel boring technology is more than just essential for the green energy transition; it’s a matter of life and death for many green energy and data center projects that are stalled due to the current grid connection backlog.

EarthGrid is addressing the biggest challenge affecting the US grid and could be a game changer in accelerating climate change mitigation. The pressing need that EarthGrid is solving is evidenced by its impressive investor backing. A notable list of venture capitalists, including Unpopular Ventures, DanuVG, Delphi Ventures, Asymmetry, and Monozukuri Ventures, as well as many notable investors like HBS Angels, Wharton Alumni Angels, Boston Harbor Angels, and Mount Global, have already invested a total of $50 million.

EarthGrid is on track to generate hundreds of millions in annual revenue within a few years. The company has a $4 billion contract pipeline across the USA and has signed a $7 billion joint venture. This level of traction is unprecedented in Kingscrowd Capital's equity crowdfunding market.

Led by Troy Helming, a green energy entrepreneur who has successfully exited several startups, including two unicorns, EarthGrid has strong potential to go public through an IPO in the next couple of years, possibly as a unicorn. That’s why Kingscrowd Capital invested in EarthGrid’s current Net Capital round.

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Company Funding & Growth

Funding history

Total Prior Capital Raised
$50,000,000
VC Backed?
Yes
Close Date Platform Valuation Total Raised Security Type Status Reg Type
10/15/2024 Netcapital $80,412,096 $1,239,194 Equity - Common Funded RegCF
08/31/2023 Netcapital $60,006,000 $3,346,521 Equity - Common Funded RegCF
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Growth Charts

Revenue History

Note: Revenue data points reflect the latest of either the most recent fiscal year's financials, or updated revenues directly from the founder, at each raise's close date.

Valuation History

Price per Share History

Note: Share prices shown in earlier rounds may not be indicative of any stock splits.

Employee History

Founder Profile

The Underground Solution to America's Electric Grid Crisis

The US electric grid is in a crisis. It needs to be quickly grown to allow for the country’s new energy needs, decarbonized to mitigate climate change, and buried to avoid frequent power cuts in states like Texas and wildfires in California. Unfortunately, the current boring, slow systems utilities use are creating the largest transmission backlog in history. It now takes three years for a new power plant to be connected to the grid, a huge opportunity cost for green energy farm investors and operators.

We talked with Troy Helming, a serial entrepreneur with 6 exits, including 2 unicorns (and a 4x Ninja Warrior contestant), who may have found the best solution to the grid’s largest-ever crisis: plasma-boring technology.

Read Founder Interview

Founders: enhance your startup's credibility on Kingscrowd. Create an account to claim this raise page.
Add to portfolio
EarthGrid on NetCapital 2024
Platform: Netcapital
Security Type: Equity - Common
Valuation: $80,412,096
Price per Share: $5.50

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Follow EarthGrid on NetCapital 2024

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