Tech
Why EnergyX raised $75M from small investors, even after taking VC money from GM and others
Nearly every founder has the same concern: how can they ensure their startup has enough cash to deliver on its promise.
For most, that means wooing venture capitalists early and often, trading equity in the company and board seats for cash to keep the lights on. For Teague Egan, it also means courting retail investors.
Egan’s company, EnergyX, has spent the last several years developing a way to extract lithium for EV batteries from briny water locked underground. To fund its operations, EnergyX has raised over $90 million from traditional investors including GM Ventures, Posco, and Eni Next, according to PitchBook. But it has also raised over $80 million from retail investors, according to Egan, including a $75 million offering that closed today.
The offering “democratizes investment,” Egan told TechCrunch. Plus, he added, “it takes some of the power away from traditional VCs that always want to beat you down for terms.”
EnergyX’s offering took advantage of SEC Regulation A, which allows companies to raise up to $75 million from retail investors every 12 months. In exchange for access to unaccredited investors, companies submit to some light SEC oversight, including the filing of semiannual reports. The company remains private — a Regulation A offering isn’t an IPO — meaning investors can’t sell their shares on an exchange.
Regulation A has been praised for allowing unaccredited investors, or those whose net worth is under $1 million, the opportunity to invest in private companies before they go public. That gives them the potential to profit handsomely should a promising startup go public.
But Regulation A has also been criticized for letting smaller investors to place bets on risky companies. For example, solar-powered EV startup Aptera has raised more than $120 million in recent years by selling shares through crowdfunding sites. But the company, which has been promising to ship vehicles for nearly 15 years, has yet to deliver a single car to customers.
In Aptera’s case, crowdfunding provided a lifeline when it couldn’t secure traditional venture investments. EnergyX has secured recent venture investments in addition to its Regulation A offerings.
The company has used that funding to develop its own approach to direct lithium extraction (DLE), which draws lithium from water. A number of startups, including Lilac Solutions and Aepnus, are pursuing their own flavors of DLE, though EnergyX takes a hybrid approach, running brines through a number of different processes depending on the water’s origin. “All these brines are very different, and there’s not a one size fits all technology,” Egan said.
Egan said he explored going public through a special purpose acquisition company, or SPAC, during the height of the craze, but ultimately decided against it. “We need to be getting substantial, positive EBITDA before we go public,” he said. Instead, EnergyX did a deal with investor Global Emerging Markets, which will provide $450 million in the form of a PIPE. In the event of an IPO, the firm will get warrants along with a fee from EnergyX; it’ll also get shares at a discount when the startup taps that equity.
Still, EnergyX’s IPO appears to be years in the future, if one ever materializes. “We’re at least going to do one more major institutional round, our Series C,” Egan said. “If that gives us enough capital to execute on our first commercial projects that will start generating revenue, then it’s a discussion with the board of directors if we feel like we should go public to raise more capital and get some liquidity for early investors. Or maybe we’re just crushing it so hard that we can start paying dividends. Or maybe those acquisition offers start flowing in from big oil and gas companies.”
Crowdfunding, which it raised through crowdfunding platform DealMaker, and the PIPE aren’t the only hedge Egan has built into the company. EnergyX is aiming to sell its DLE equipment to companies mining lithium like Posco and ExxonMobil. But, Egan said, “those are really long sales cycles because they’re multi-hundred [million] if not billion-dollar final investment decisions.” So in addition, it is also planning to pull lithium out of the ground itself and sell it to customers directly. “In order to control our own destiny, we needed to do it ourselves and go acquire our resources.”
Currently, EnergyX has a lease to explore 90,000 acres in Chile, and Egan said it has a submitted letter of intent to lease 15,000 acres in Texas. In the first half of next year, Egan said the company will be commissioning a demonstration plant at both sites, each capable of producing 50 tons of lithium per year. Egan hopes the first commercial-scale plants are up and running by 2027.
The Regulation A offering will keep EnergyX running for at least two more years, Egan said. And because the common stock offering removes some pressure to raise from VCs, who tend to require preferred stock in exchange for their investment, it should also allow Egan to retain control of his own destiny a bit longer. According to the company’s semiannual report filed in September, he retains 47% of the company’s shares on a fully diluted basis.
“There’s an extremely high percentage of startups that the founding CEO gets booted because of venture capitalists,” Egan said. “That’s not where I want to be.”
Tech
Cathie Wood’s ARK makes its first lead investment in startup Lucra — and it isn’t AI
ARK Invest Venture Fund has made its first-ever lead investment in an early-stage startup called Lucra, firm founder Cathie Wood told TechCrunch.
“We feel pretty excited about it,” Wood (pictured above) said in the recent interview regarding the investment in the startup.
Lucra developed a software platform that reimagines corporate loyalty programs into interactive, esports-like events such as tournaments where customers can play each other, even betting or winning cash or company giveaways. The startup said its customers include Five Iron Golf, Chess Kings, and Dave & Buster’s.
Lucra announced on Wednesday that it raised a $20 million Series B, led by the ARK fund, with participation from Alumni Ventures, Astralis Capital, Harlo Equity Partners, Simplex Ventures, SeventySix Capital, and WTI.
There are a few reasons why the famed financial company has never led a startup deal before. For one, the ARK Invest Venture Fund is not a typical VC fund. It’s an SEC-regulated interval fund (also known as a closed-end mutual fund), meaning anyone can invest in it, for as little as $500. However, it is not traded on a public exchange, so investors cannot sell shares at will. They can sell limited shares on specific dates, quarterly.
Wood also noted that the person running the fund, director of research Nick Grous, “is a tough sell,” leaving startups with the difficult task of getting him excited enough to advocate to lead a deal.
What’s even wilder is that ARK was particularly gun-shy about this sort of business because it got burned after investing in a somewhat similar company a few years ago.
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“We had actually owned a company called Skillz, which kind of operated in this space,” Grous said. “It didn’t work out well for us and many other investors.”
Skillz was a once-hot public company that later became mired in troubles and lawsuits. The big difference, the investor said, is that Lucra is a B2B platform, selling interactive esports as a loyalty program, rather than trying to license and run games directly to consumers.
“Overcoming our initial hurdle, especially given our experience with Skillz, overcoming our reticence, having Nick overcome it, that was our first screen,” Wood said of how this startup convinced her company to write a big check.
In this case, ARK Invest had participated in Lucra’s previous Series A round, and had grown familiar with its business model, its trajectory, and its founder and CEO Dylan Robbins, Grous told TechCrunch.
“We had been in constant communication,” Grous said, adding that his venture-esq fund attempts to have quarterly conference calls with the startups in the portfolio, similar to how public companies report to investors quarterly. ARK mostly works in the public market, offering a slate of publicly traded EFT funds.
Despite already being in the portfolio, Lucra’s founder was grilled numerous times when it came time to buy more shares — first by Grous and then ARK’s investment committee, both he and Wood described.
During those calls, Robbins “had thought about all the things that went wrong” with similar companies like Skillz, as well as with Lucra, and had answers, Wood said. “No matter how many times we went at him, his conviction, there was just no let up,” she described.
It also helped that this company’s financials were promising, it was in an area that ARK knew well, and this was not AI, aka the most hyped, most expensive area these days.
“We’ve been underwriting the sports-betting space, understanding the gamification aspects of entertainment,” Grous said, meaning that the investment firm could “really understand the opportunity here.”
The ARK Invest Venture Fund holds shares of companies like Epic Games, Kalshi, and Discord, for instance. It also holds OpenAI, Anthropic, Replit, Grok, and Perplexity, so it knows the AI scene well.
“We are all over AI, just like everyone else, because it is a massive revolution,” Wood explained. “But in the process, a lot of companies are being neglected.” This means that spotting such potentially neglected companies is “our opportunity because we are doing research in many other areas than AI,” she said.
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Tech
Cosmetics giant Rituals confirms data breach of customer membership records
Netherlands-based cosmetics giant Rituals has confirmed a data breach affecting customers’ personal information after hackers stole reams of data from its membership database.
The company disclosed the breach on Wednesday, according to an email sent to customers that TechCrunch has viewed and verified.
Rituals said it identified an “unauthorized download” of members’ data in April that contained customers’ full name, date of birth, gender, postal and email address, and phone number, as well as their preferred Rituals store and account type.
When reached by TechCrunch, Rituals spokesperson Eline van Malssen said the hacker stole membership data about customers in Europe and the United Kingdom.
TechCrunch has learned that some customers notified by Rituals are based in the United States. The spokesperson confirmed the incident also affects some U.S. customers.
Rituals did not describe the nature of the cyberattack and the company said its investigation was underway to understand how the data breach happened.
The cosmetics giant is the latest retailer to have customer membership data stolen in the past year, following a string of intrusions at U.K. grocery and shopping chain Co-op and Marks & Spencer, among others. Customer records can be attractive targets for hackers who steal the data and extort the company for a ransom in exchange for not publishing the information online.
When reached with questions about the incident, a Rituals spokesperson declined to comment on whether the company received any communication from the hackers, to share a more precise timeline of the breach, or to provide the exact number of affected members, citing unspecified “security reasons.”
According to its website, Rituals has over 41 million customers in its membership database. The retail giant made €2.4 billion euros ($2.8 billion) in revenue in 2025.
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Tech
Rivian R2 production has started despite tornado damage to factory
Rivian has rolled the first customer-ready R2 SUVs off the production line at its factory in Normal, Illinois, just days after it was hit by an EF-1 tornado that tore off part of the roof.
Despite the damage, founder and CEO RJ Scaringe told Bloomberg Television on Wednesday morning that Rivian doesn’t expect any delays to the R2’s rollout, which is crucial to the company’s survival.
“The tornado went through the south end of the plant, and ripped the roof off the building, and knocked down some of the plant as well, and so the last 72 hours have been around the clock,” he said. Scaringe explained that Rivian has had to change how and where it brings some materials into the factory to build the R2.
But “we’re not making any changes to the plan,” he said, referring to the company’s production roadmap.
Scaringe wasn’t asked when Rivian will make the first R2 deliveries during the interview. The company has previously said it will start shipping R2 SUVs before the first half of 2026 comes to an end.
Getting the R2 into production is a major milestone for the company. It’s the first production vehicle Rivian has made that has a chance to reach mass-market customers, as it costs far less than the company’s current R1 EVs. It’s also supposed to help the company finally reach profitability after years of losing money on every vehicle it sold.
The company has big expectations for the R2. Rivian told investors earlier this year that it expects to deliver between 20,000 and 25,000 of the SUVs by the end of 2026. If Rivian achieves that, it would become one of the fastest-scaling new EVs ever launched in the U.S., second only to Tesla’s Model Y.
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That said, Rivian is launching with a version of the R2 that costs nearly $13,000 more than the $45,000 price tag the company spent years promoting. The launch edition R2 starts at $57,990, with a slightly cheaper $53,990 variant coming by the end of this year. Rivian won’t sell an R2 for under $50,000 until the first half of 2027, and a true base model starting at $45,000 won’t hit the market until late 2027.
And that’s if the $45,000 R2 ever arrives at all. When Rivian announced pricing for the SUV in March, the company said the base model price will start “around $45,000” — not “at $45,000” as it had promoted on its website as recently as February.
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