UAE leads $3B Boring Company round at $23B valuation as Musk expands tunnel plans beyond Dubai

Elon Musk’s The Boring Company has raised $3 billion in a Series D led by the United Arab Emirates and affiliated investment entities, valuing the tunnelling startup at $23 billion.

Dubai-based Shamal Holding was among the named investors, alongside Sequoia Capital, Andreessen Horowitz, Temasek, Vy Capital, Human Capital, Valor Equity Partners and Baron Capital. The Boring Company didn’t identify the other UAE entities involved or disclose their individual commitments.

The round comes less than two months after The Wall Street Journal reported the company was seeking as much as $4 billion at a roughly $20 billion valuation. It ultimately raised less capital but closed at a higher valuation.

That valuation has increased roughly fourfold since April 2022, when Vy Capital and Sequoia led a $675 million Series C valuing the company at $5.675 billion.

The UAE investment extends a relationship that moved from proposal to construction contract earlier this year. Dubai’s RTA signed an agreement with The Boring Company in February for the first phase of Dubai Loop, beginning with a 6.4km, four-station tunnel between DIFC and Dubai Mall. The full proposed network stretches 22.2km across 19 stations and is estimated by RTA to cost about AED 2 billion.

The latest deal goes substantially further. The Boring Company says it plans to deploy more than 150km of additional tunnels across the UAE, explicitly separate from the already awarded Dubai Loop. It hasn’t disclosed where those tunnels would be built, their cost or a delivery timetable.

“Building upon significant existing success collaborating with the UAE on Dubai Loop, this strategic investment will accelerate the partnership to deploy mass quantities of underground infrastructure across the UAE,” the company said.

Founded by Musk in 2016 and later spun out of SpaceX, The Boring Company is trying to reduce the cost and time required to build transport tunnels, with passengers carried point-to-point in Tesla vehicles rather than trains. Its only operating passenger network is currently in Las Vegas, where its Loop system has carried more than three million passengers, while another system is under construction in Nashville.

The company has had a considerably longer list of proposed projects than completed ones, with earlier plans in cities including Chicago, Los Angeles and Baltimore failing to progress. Dubai became its first international construction contract this year, while Nashville gives it a second major project under construction outside Las Vegas.

The current fundraising also came with an unusual ask of investors. The Wall Street Journal reported that some participants were required to help The Boring Company recruit employees or secure introductions to government officials in potential project locations, tying access to the round more directly to business development.