A former Tesla executive who departed last year is now aiming to raise funding for a new energy startup, which is set to help build next-generation grid hardware.
Drew Baglino, Tesla’s former SVP of Powertrain and Energy, is aiming to raise $30 to $50 million in Series A funding for his new startup, Heron Power, according to three sources familiar with the matter who spoke to Axios. Heron is set to produce next-generation transformers for electrical grids, and two of the sources say the company began raising funding last month.
The funding round is likely to be led by Capricorn Investment Group, which is an impact investment firm that’s particularly focused on sustainability and energy projects. The sources also said that Baglino’s involvement in the project could push the offering’s valuation into the hundreds of millions, though neither he nor Capricorn responded to Axios’ requests for comment.
“If he opened a taco stand there’d be significant interest,” one source says of Baglino. “He’s an A plus player.”
Transformers work to adjust the voltage of electricity between the grid and front-facing applications, and as power-intensive AI data centers become more common, they’re considered to be in somewhat short supply. The firm also says that the transition to sustainable electricity generation alone will require a three- to five-fold increase in global electricity generation and consumption.
“If he opened a taco stand there’d be significant interest. He’s an A plus player.”
-anonymous source on former Tesla SVP Drew Baglino trying to raise funding for a new startup pic.twitter.com/boOndfGe0l
— TESLARATI (@Teslarati) April 7, 2025
READ MORE ON FORMER TESLA EXECUTIVES: This Tesla executive is leaving the company after over 12 years
Heron is planning to manufacture solid-state electrical transformers within the U.S., though the sector is fairly competitive with startups aiming to build more efficient versions of the hardware that omits copper and iron components in favor of semiconductors.
Currently, around 80 percent of high-voltage transformers are imported into the U.S., and the news also comes as U.S. President Donald Trump’s global tariffs take effect.
“Heron Power is building cutting-edge power electronics for the 21st-century grid,” the company writes on its website. “We aim to debottleneck the growth of electricity generation and consumption with scalable, innovative, and less costly hardware solutions, accelerating the electrification of everything.”
Some investors have said that the valuation estimates are too high, and have been repelled by this and current market factors.
“You’re betting he can build it without a glitch, and that the capital markets will stay open for him,” one source explained. “That’s a really narrow window.”
Baglino worked with Tesla for 18 years, rising up through the company to land in his final position as the SVP of Powertrain and Energy. He played a major role in leading general product engineering, as well as the engineering and development of Tesla’s electric vehicle (EV) batteries, motors, drive units, and power electronics, alongside work on the company’s energy products.
Redwood Materials Launches San Francisco R&D Center