Khosla-Backed Energy Startup Nabs $258 Million to Help Power Data Centers

(Bloomberg) -- A startup that builds novel generators has raised $258 million, fueled by the tailwinds of power-hungry artificial intelligence. 

Mainspring Energy Inc. counts among its customers a unit of NextEra Energy Inc., one of the world's biggest renewable energy suppliers, as well as a growing number of data center customers that use the company’s so-called  linear generators as a source of power. The technology works by creating a flameless reaction of air and fuel that helps produce electricity.

“The demand has been really quite outstanding,” said Samir Kaul, founding partner and managing director at Khosla Ventures, a follow-on investor who gave the company its first check in 2010. “The bottom line is that if you need power now, you can't wait for the grid and you can't wait for natural gas turbines to come online.”

Mainspring’s technology can run on any kind of gaseous fuel, including natural gas, ammonia, propane or biogas. That’s helpful because data centers need cheap, reliable power, which is getting increasingly hard to access amid growing competition. The Electric Reliability Council of Texas — which oversees the state’s grid — projects 30 nuclear plants worth of electricity will need to come online by 2030 to meet demand. 

The Menlo Park, California-based company is shipping generators capable providing tens of megawatts of power to US data center customers this year, said chief executive officer and co-founder Shannon Miller, adding that the generator provides power at a cost that’s competitive or even lower than power from the grid in many locations. The company declined to name its data center customers. When compared to traditional gas engines or turbines, it has a lower total cost of ownership with a three-year payback period. 

The Series F round was led by General Catalyst, and the firm’s senior advisor Tom Linebarger will join the Mainspring board, along with Bethany Mayer, former chief executive officer of public technology company Ixia. Other investors include Amazon.com Inc.’s Climate Pledge Fund and Temasek Holdings Pte. Mainspring last raised $290 million in a Series E round in 2022.

The challenge for Mainspring is convincing new customers to try the product, said Linebarger, former chairman and chief executive officer of Cummins Inc., adding that utilities and data center operators are often hesitant to try new technology, because “downtime costs a lot of money.”

Because switching the fuel source doesn’t require any hardware changes, customers can switch Mainspring’s generators from running on natural gas to cleaner fuels such as hydrogen. Customers' decision to switch from natural gas to a cleaner but more expensive option like hydrogen “will come down to cost,” Miller said, adding that a hydrogen supply chain and infrastructure “will take time to build.” The timeline may shift due in part to President Donald Trump’s push to boost fossil fuels and scale back investments in clean energy.

©2025 Bloomberg L.P.