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Investing.com -- Elon Musk’s Boring Company is in talks to raise about $4 billion from investors at a valuation of roughly $20 billion, The Wall Street Journal exclusively reported.
The financing has not yet closed, and its size and valuation could still change. Boring Company President Steve Davis did not respond to requests for comment.
The proposed valuation would represent a steep increase over the approximately $5.7 billion assigned to the tunnelling startup following its 2022 funding round.
That transaction raised $675 million from investors including Vy Capital, Sequoia Capital and Founders Fund. A new $4 billion investment at the reported valuation would rank among the larger recent private-market technology funding rounds.
Boring Company was spun out of SpaceX in 2018 and develops tunnelling machines intended to reduce the cost of underground construction. Its main operating project is a transportation network beneath the Las Vegas Strip, where Tesla vehicles carry passengers to and from the Las Vegas Convention Center.
Several previously proposed transit systems in Baltimore, Chicago and Los Angeles have failed to progress. Those projects were presented as privately financed networks that would generate revenue from passenger fares.
The company now has an underground loop under development in Nashville, which it is funding privately.
Another proposed system in Dubai was announced in February. The first phase would cover four miles, cost about $154 million and take one year to complete. A planned second phase would extend the route to 14 miles at an estimated cost of $545 million over three years.
Funding arrangements for the Dubai development have not been disclosed.
The capital raise comes amid sharp volatility across Musk’s wider group of companies. Tesla shares recently lost 15% in one session after the automaker missed earnings expectations and reported its first negative cash flow in two years.
SpaceX has also fallen about 50% from its post-listing peak after going public in June through a record initial public offering that raised $86 billion.
Strong private-market demand for access to Musk-controlled businesses could still support Boring Company’s proposed valuation, despite its limited number of completed commercial networks.
