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
Passionfroot raises $15M to expand its B2B creator marketplace to the US
Passionfroot, a German startup building a marketplace connecting B2B creators with brands, said on Wednesday it has raised $15 million in a Series A funding round led by Insight Partners.
Rebecca Liu-Doyle, managing director at Insight Partners, said Passionfroot is placed well at a time when creators are specializing as AI companies look for more visibility.
“Passionfroot has the perfect dynamics on both sides to warrant a true marketplace for B2B creators. On the demand side, there is increasing consumerization of the way B2B brands go to market. That’s a product of, in part, AI technology requiring evangelism, narrative building, and education. On the supply side, there are people who have real expertise, understand a market deeply, and want to create quality content,” she told TechCrunch over a call.
With the funding, the Berlin-based startup’s co-founder and CEO, Jen Phan, is moving to New York, where Passionfroot is opening an office to expand its U.S. operations. The company is also opening an office in São Paulo, and expanding its current headcount of 15 employees.
As AI makes it easier to build products, companies are focusing on using creators to improve brand recall and recognition, Phan said.
“Every head of marketing or growth leader I’m talking to is saying really the same thing: AI is commoditizing software and flooding every category with new products, features, and launches. It’s incredibly crowded and noisy. That is why B2B buyers are going to channels like LinkedIn, a creator’s Substack, or a podcast on YouTube to discover new products and tools,” she said.
Phan said over the last year, the company increased its revenue by 13 times, and onboarded clients such as ElevenLabs, Figma, Replit, Framer, and Gamma.
Since its last fundraise in 2024, the company has released an AI agent called Zest, which helps brands create, execute and monitor the performance of campaigns. Passionfruit claims Zest can also help companies find suitable creators both inside and outside the platform that are suited to its marketing strategy.
The startup says it uses a proprietary creator graph based on data about reach and performance from thousands of campaigns. There’s also a wallet that companies can use to pay creators across the globe, and measure their expenditure.
Passionfroot claims it has paid at least $10 million to creators on its platform in the last 18 months.
The company says it is working on helping its clients measure how a campaign is impacting AI citations, and how their brand appears in AI-powered answers. The startup is also planning to build AI features for creators, such as helping them with monetization tips and content ideas.
The funding comes as creator platforms like Substack and Beehiiv move to help creators find better monetization opportunities. Beehiiv launched a new community and ad marketplace last week, and Substack has introduced subscriber-only perks within newsletters.
Passionfroot’s Series A also saw participation from existing investors Creandum, Supernode Global, and s16vc. The company has raised more than $21 million so far.
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Tech
Cascade raises $3.5M to help construction firms find and win projects
Cascade, a startup building a platform to help architecture, engineering, and construction firms find and win projects, has raised a $3.5 million seed round from Andreessen Horowitz Speedrun, Ada Ventures, and Snowball VC.
Launched in 2025, Cascade is a result of its founders, Hannia Zia and Joana Ferreira, witnessing firsthand the difficulty construction businesses face with predictably securing work.
“My mother worked in a company that sold materials to construction companies, and my uncle built mansions in the Middle East. They’re incredible at their craft but just don’t have access to the right tools to get more work,” Ferreira told TechCrunch. And Zia recalled the time her father tried starting a construction business back in her native Pakistan: “He just couldn’t get enough projects to sustain himself.”
Zia describes the current process of finding construction projects as a “constant treasure hunt,” with firms having to log into each U.S. state, city, district, county, and federal agency’s portals. “So if you’re really good at building suspension bridges, you have to find all of those opportunities across these disparate portals.”
Cascade aims to help architecture, construction, and engineering firms on this front by tracking ongoing and upcoming projects, and then using prior tender data to predict which developers are likely to win the deals.
Here’s how the platform works: A company signs up to the platform, and then Cascade uses AI tools to determine which projects they have the best chance of winning. It also predicts what projects are coming up, using different signals and data points across U.S. states, local districts, private contracts, and federal agencies. For example, if a state announces a $100 million affordable housing grant, Cascade will monitor which developers won the grant the last time it was announced.
“We connect that data, and we tell our customers: ‘Most likely one of these five developers will win this newly announced grant, so go start talking to them to win projects,’” Ferreira explained.
The duo applied to a16z’s Speedrun last September. They said the pressure to do well on demo day and being around the “brilliance” of other founders helped the company sign contracts with firms that have built the JFK and La Guardia airports, Four Seasons hotels, and some data centers. “Speedrun gave us visibility and a stamp of approval to close big deals,” Zia said.
The startup will use the fresh cash to go to market, host industry events, and hire more engineers.
Other startups in this area include GovWin IQ and ConstructConnect, but Ferreira argues Cascade is a bit more AI-native than these platforms.
“Every time a customer wins a bid, they give feedback, so the system keeps getting smarter. Over time, we’ll have a complete map of the industry that our AI can traverse to predict the best projects and leads for each customer,” she said.
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Tech
If you pay a hacker’s ransom, chances are that they’ll come back for more
Governments have long warned not to pay a hacker’s ransom demands, arguing that doing so only lets criminals profit from their cyberattacks and funds the next one. There’s also another reason: The hackers are unlikely to leave you alone if you pay up once, and many will come back demanding more.
In a report published Wednesday, cybersecurity giant Proofpoint said it surveyed 953 companies and found that over one-third of companies that paid a hacker’s ransom were hit with a second extortion demand. The findings underscore the long-held understanding among security researchers and network defenders that it’s impossible to negotiate in good faith with an extortion racket because there’s no incentive for the other side to actually walk away.
Proofpoint’s data shows that ransomware attacks and extortion attacks have evolved from a single transaction where hackers would get paid once and move on, into an effort using multiple forms of leverage, such as retaining stolen data under the threat of publicly releasing it.
While hackers have claimed in the past that they will delete or destroy the victim’s stolen data, past incidents have shown that not to be the case.
Last month, a hack at market research firm Klue exposed data belonging to its customers, including several cybersecurity firms. The company said it struck a deal with the hackers, who claimed to have deleted the data, but the company later conceded that a separate hacking group swiped a sample of the company’s stolen data, leaving its customers exposed to potential future extortion demands.
A similar situation befell Change Healthcare in 2024, after a Russian-speaking ransomware gang stole the health and medical data of the majority of people in America, some 192 million people. Amid a dispute between the hackers and their affiliates (criminal groups often subcontract out attacks), Change Healthcare paid separate ransoms to both groups of criminals to keep the sensitive medical data off of the internet.
Security researchers have long suspected that ransomware gangs and extortion rackets will keep hold of the victim’s stolen data, even after a payment is made. U.K. law enforcement confirmed this during their takedown efforts targeting the prolific LockBit ransomware gang in 2024. Police said that they found victims’ stolen data stored on LockBit’s servers long after they had paid the ransom.
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