Technical

Srinivasa Reddy Kandi: Why Solid-State Transformers Are Drawing Major Investor Attention

February, 21, 2026-02:04

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Why Solid-State Transformers Are Drawing Major Investor Attention:

While much of the electrical grid has evolved over time, transformers remain largely unchanged since the era of Thomas Edison. Built primarily from copper, iron, and oil, conventional transformers are dependable and efficient — but they offer little in the way of intelligence, flexibility, or real-time control.

A new wave of startups is aiming to change that with solid-state transformers powered by advanced electronics. These next-generation systems promise to give grid operators far greater visibility and control over how electricity is distributed, functioning more like smart routers for energy networks.

Subhashish Bhattacharya, co-founder and CTO of DG Matrix, describes the technology as a powerful, adaptable device comparable to an internet router. Unlike traditional transformers, which passively respond to grid fluctuations, solid-state versions can actively manage electricity flows, respond to surges, and improve overall grid resilience.

Investor interest has surged alongside the technology’s potential. DG Matrix recently secured $60 million in Series A funding, while Heron Power raised $140 million in a Series B round. In November, Amperesand closed an $80 million round to target growing demand from data centers.

Traditional transformers perform a single core function and lack monitoring or control capabilities. As Heron Power founder and CEO Drew Baglino explains, legacy systems cannot intelligently respond when electricity demand spikes or a power plant unexpectedly goes offline — creating vulnerabilities for modern grids.

Solid-state transformers, by contrast, can integrate electricity from diverse sources such as fossil fuel plants, renewable energy, and battery storage. They can also convert power between alternating current (AC) and direct current (DC) at multiple voltage levels, effectively replacing several conventional devices with one versatile system.

With grids under pressure from electrification, renewable integration, and data center expansion, investors are betting that smarter, software-driven transformers could become a foundational technology for the next generation of energy infrastructure.

Author: Kandi Srinivasa Reddy, Srinivasa Reddy Kandi, #KandiSrinivasaReddy, #SrinivasaReddyKandi