Elon Musk’s tunnelling startup, The Boring Company, has taken an unusual approach to its latest funding round by asking some investors to contribute more than just capital.
People familiar with the matter said some investors who participated in the latest round were required to help recruit employees or support business development. This could include introducing the company to government officials in locations where it plans to build tunnels.
The Boring Company builds machines designed to dig underground tunnels at lower costs than traditional construction firms. The company recently closed a funding round that values it at around $20 billion, according to people familiar with the matter.
The company has also shared details of specific roles it wants to fill with potential investors. If investors fail to provide suitable candidates for these positions, The Boring Company has the right to buy back some of their shares, the people said. The company did not respond to requests for comment.
The requirement highlights the strong interest Musk continues to attract from investors. The billionaire also leads Tesla and SpaceX, and many private-market investors see companies linked to Musk as attractive investments. This has encouraged some investors to go to significant lengths to participate in his companies’ funding rounds.
Musk’s rocket company SpaceX went public in June through a record-setting IPO that raised $86 billion from Wall Street. Its market value nearly doubled immediately after the debut, while its shares have since fallen around 7%.
The Boring Company was spun off from SpaceX in 2018. It currently operates a transportation network beneath the Las Vegas Strip and has proposed tunnel projects in Baltimore, Chicago and Los Angeles.
The company is also developing a new loop in Nashville, which it is funding privately. Earlier this year, it announced plans for an underground loop in Dubai. The first 4-mile phase is expected to cost $154 million and take 1 year to complete.
A second phase would expand the route to 14 miles. It is expected to take 3 years and cost $545 million.
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