Elon Musk led Boring Co. Raises Funding at Nearly $6 Billion Valuation

Elon Musk’s tunneling startup Boring Co. has raised $675 million in a funding round led by Vy Capital and Sequoia Capital. The round values the startup at $5.675 billion, the company said in a press release on Wednesday. 

Boring Co. aims to “solve traffic” by building transportation networks in tunnels deep underground. The company already has a tunnel system in place at the Las Vegas Convention Center, and ferried around passengers at the CES conference earlier this year. The company aims to expand in other cities in coming years, and said it would use the new funding to “significantly increase hiring.”

Other investors participating in the round include Valor Equity Partners, Founders Fund, 8VC, Craft Ventures and DFJ Growth. The fresh financing comes three years after Boring Co. raised $120 million at a valuation of $920 million. 

Boring’s “technology is now past the state-of-the-art, and improving at an exponential rate,” Sequoia Capital’s Shaun Maguire wrote in a blog post. 

Musk has long-standing connections to Sequoia. An early Musk company that facilitated payments online, X.com, was backed by Sequoia’s Mike Moritz, although after the company merged with another startup and became PayPal, Musk would be fired as chief executive officer amid management disagreements. Sequoia’s Roelof Botha worked at PayPal as chief financial officer.

Boring has evolved over the years since its founding in 2016, when its vision was long-haul transportation over hundreds of miles. Now, it specializes in shorter trips within cities -- with some easier to work in than others. Planned projects in Chicago, Los Angeles, and a connection between Washington and Baltimore have fizzled, even as the Vegas project has won kudos.

The new funding round includes strategic investments by real estate companies, including Brookfield, Lennar Corp., Tishman Speyer and Dacra Development Corp. That could indicate that Boring Co. is trying to integrate its tunnels into new building projects, as it has done with two hotels in Las Vegas.