Musk’s Boring Company Seeks $4 Billion Funding at $20 Billion Valuation, More Than Tripling Previous Round

While several of Elon Musk’s publicly traded companies experience dramatic stock volatility, his privately held tunnel-digging startup The Boring Company is seeking a new funding round at a valuation of approximately $20 billion, aiming to raise about $4 billion. This valuation represents a more than threefold increase from the $5.7 billion valuation following its 2022 funding round.

According to The Wall Street Journal, citing people familiar with the matter, the funding round has not yet closed, and both the fundraising size and valuation terms could still change. Reporting from Investing.com also confirmed the news, noting that Boring Company President Steve Davis did not respond to requests for comment.

If the round closes at the target valuation, the $4 billion raise would rank among the largest private-market tech funding deals in recent periods. In 2022, the company completed its previous funding round, raising $675 million from investors including Vy Capital, Sequoia Capital, and Founders Fund.

Grand Multi-City Blueprint, Limited Actual Projects

The Boring Company was spun off from SpaceX as an independent entity in 2018, primarily developing tunnel-boring machines that it claims achieve construction costs far below those of traditional construction firms. The company’s core operating project is currently located beneath the Las Vegas Strip—a transit network where drivers transport passengers in Tesla vehicles to and from the Las Vegas Convention Center.

Although the company has pitched ambitious tunnel plans to multiple cities, most have failed to materialize. Previously, the company proposed privately funded tunnel transit projects to cities including Baltimore, Chicago, and Los Angeles, planning to generate revenue through ticket sales, but none of these projects achieved substantial progress.

Currently, the company is self-funding construction of a new underground loop in Nashville, Tennessee. In February of this year, the company also announced plans for the Dubai Loop, with more specific details: Phase 1 spans approximately 4 miles at an estimated cost of roughly $154 million, with an expected construction timeline of one year; Phase 2 would expand to 14 miles at an estimated cost of $545 million, with a construction timeline of approximately three years. However, the funding sources for the Dubai project have not yet been clearly disclosed.

The “Musk Premium” Encounters Market Headwinds

Despite The Boring Company’s limited number of completed commercial operating networks, private-market investors continue to view Musk-controlled enterprises as high-certainty investment targets, willing to pay a significant premium for entry opportunities.

This logic has been validated in past transactions. Investors who participated in Musk’s $44 billion acquisition of Twitter were once deeply underwater on paper, but as Musk first merged Twitter into artificial intelligence company xAI and subsequently folded the combined entity into SpaceX, those investors ultimately achieved profitable exits.

However, Musk’s publicly traded companies have faced notable pressure recently. Tesla (TSLA) plunged 15% in a single day on Thursday, erasing approximately $215 billion in market value. The company’s latest earnings report missed market expectations and recorded its first negative free cash flow in two years, raising investor concerns about its growth prospects.

SpaceX’s stock performance has been similarly challenging. In June of this year, SpaceX entered the public markets through a record-breaking initial public offering (IPO) that raised $86 billion, with its post-listing market value nearly doubling from the offering price at one point. Recently, however, its stock price has pulled back approximately 50% from peak levels.

Despite the turbulence in secondary markets, enthusiasm for Musk-affiliated companies in private markets appears not to have fully subsided. The Boring Company’s plan to pursue a large-scale funding round at a $20 billion valuation will once again test investor confidence and patience in Musk’s emerging ventures as his business empire faces headwinds.