Dig, baby, dig
Infrastructure and utilities systems across the world are failing. In recent years, aging infrastructure combined with increased storms and wildfires has led to a rise in utility-related disasters. According to a report coordinated by the U.S. Water Alliance and the American Society of Civil Engineers, the United States would need to increase its investment in water infrastructure by $2.2T over the next 20 years, or roughly $109B per year to close the water industry’s current investment gap.
In 2022, the combination of the American Rescue Plan Act (ARPA) and Infrastructure Investment and Jobs Act (IIJA) delivered a potent one-two punch for the water and sewer sectors, providing more than $350B in financial assistance, with water and sewer projects. According to the American Society of Civil Engineers and U.S. Army Corps of Engineers, the average age of our sewer and water pipes is 45 years old, with some cast-iron pipes more than a century old. A relevant example of the scale of this problem was recently featured in KQED-NPR: to fix the underground sewage pipes in just three neighborhoods of our sewer infrastructure in San Francisco will cost $600M.
Traditionally above-ground utilities, like power grids, are also fragile and vulnerable to man made threats. In 2021, a series of winter storms triggered a failure of the Texas power grid resulting in nearly $200B in damages and hundreds of deaths. The Texas grid is notoriously disconnected from the rest of the United States which made redirection of power from other states impossible. A few years earlier, equipment owned and operated by PG&E caused 2018’s Camp Wildfire in northern California, leading to many deaths and ultimately a multi-billion dollar settlement.
Power consumption in the U.S. is on pace to set a record in 2022 as the economy demands more electricity and average temperatures continue to rise. Back in November, the EIA projected power demand to hit 4.04T kWh by the end of the year — an all time high. This snapshot of the situation in the U.S. is not an outlier — Exxon projects power demand to grow 50% by 2050.
These trends of aging infrastructure, climate change, and global power reliance point towards the fact that utilities are fragile and vulnerable to natural and man-made threats. The solution? Move everything underground.
The value proposition of bringing power grids underground and overhauling aging water and sewer tunnels is clear. Utilities will be significantly more protected from climate-related disasters reducing the risk of failures like we saw in Texas.
But in order to bore new underground utility tunnels, the world needs new tools. Trenchless tunneling machines have been around for decades, and the industry struggles with the reality of installing critical infrastructure through disparate geologies. When construction teams encounter geologies they didn’t anticipate, especially geologies that are difficult to bore through like rocks, sands, and high water table soils, project costs skyrocket. The biggest risk in boring utility tunnels is encountering a nightmare geology you didn’t anticipate.
Put simply, in order to underground the world’s infrastructure, we need more flexible tools that can excavate all geologies. We need an integrated tunneling method that can bore through all geologies at a variety of diameters, especially the geologies that are a “nightmare” for traditional trenchless teams. For example, think of the greater Denver metroplex which is experiencing massive population growth. New communities are expanding into the Rocky Mountain range from the plains and the reality for trenchless contractors is that they can expect to encounter soft soils, cobblestone, boulders, and even intact rock in a single project.
As a result, the boring business has become a fragmented industry because there is no single technological solution in the market capable of boring through all geologies. Most of these players operate a single machine and drill head, making each project dependent on a machine that is effectively a “one-trick pony.” Changing ground conditions can lead to damaged equipment in the millions of dollars and as a consequence, increased time for project completion and increased project cost.
Petra is transforming grid infrastructure to make undergrounding more accessible for all.
There has yet to be an operational company that has built an all-geology utility tunneling tool that is flexible enough to accommodate a wide range of diameters to bore through all geologies in a single integrated machine.
Petra’s integrated robot bores critical utility tunnels — it is the first electric-powered trenchless multi-tool on the market. These microtunnels are the ideal size to service different types of utility applications. Petra’s new methodology enables utility installations through the hardest rocks and softest sands on earth, faster and cheaper than conventional methods. These conditions are often located in fire and wind prone areas as well as challenging coastal regions. This technology enables Petra’s “core” business in the construction of water and wastewater lines, and its “near core” business is the construction of power lines, as well as pipe rehabilitation.
Petra’s machines are especially performant in the types of nightmare geologies that traditionally drive up the cost of utility tunneling with conventional methods. Petra’s multi-tool robot can bore through difficult soft soils and softer rocks between 8 and 72 inches with the flexibility to be powered electrically. The hard rock module is non-contact and utilizes a thermal drill cutterhead, removing thrust and consumable cutting discs as a requirement for excavation. Its various modules for different geologies can be swapped in as little as 15 minutes versus the days or weeks it could take the one-trick ponies.
The value that Petra’s machines bring isn’t theoretical either. To date, Petra’s system has completed 18 jobs in LatAm and is on track for use on various job sites across the United States with dozens of more customers lined up in early 2023. Petra is working with regional trenchless contractors through strategic partnerships in order to get their machines out on a variety of jobs in 2023 and is already bidding on jobs with several North American contractors. Through these partnerships, Petra plans to provide exclusive access to their systems. Petra is equipping existing trenchless tunneling teams with more sophisticated technology, giving them a competitive advantage when it comes to winning contracts while keeping costs low.
In an impressive early demonstration, Petra’s machine bored through 20 feet of Sioux Quartzite, considered one of the hardest rocks on Earth, and a separate tunnel through 40 feet in granite.
Earlier this year, Petra acquired and integrated with Zilper, a Bogota-based manufacturer of its own boring machine capable of digging through high water tables, cobbles, boulders, and watery sand and mud. This combination of Zilper’s trenchless machine with Petra’s hard rock module presents a solution to address the trenchless market and grow market share in geologies through which others weren’t able to previously bore. Petra’s service addressable market dominates that of the vast majority of niche competitors.
At first glance, a full-stack tunneling service would require expensive machines whose costs are passed down to the end user. But Petra’s costs are considerably less, at times up to 90% less, on a per-job basis. An average job today can take millions of dollars as initial proposals balloon once you factor in backup machines and potential complications in the process. Sometimes, a contractor will hit unplanned geology, either breaking the machine or requiring a new part to be brought in. Petra eliminates these headaches because of its integrated system for tunneling needs. Petra allows contractors to complete a job in less time, for less money, and without worrying about the unknown.
In the past year, the company has achieved important milestones::
- Non-contact cutterhead
- Trenchless machine remotely operable via Petra’s software platform
- Fully vertically-integrated trenchless company (R&D + Manufacturing + Construction Services)
- Multi-tool in the trenchless industry
- Hybrid-powered trenchless multi-tool
- Machine to bore through all geologies, including the world’s most difficult geologies
In addition to this, Petra has a patent portfolio of 23 patents issued or pending, two products currently in the market and one in the final stages of R&D. The company will be scaling out its commercial services in 2023: boring-as-a-service.
The San Francisco-based company has some of the grittiest founders we have ever met at Republic Capital — and they have to be. Working in a field like construction or digging utility tunnels requires you to walk the walk and talk the talk.
You can get an idea as to why they’d want to tackle such a difficult problem from their founding story:
“For years, Petra CEO and Co-Founder Kim Abrams watched her home state of California crumble under the pressure of natural disasters. After running air purifiers 24/7 for months at a time to keep her home air breathable in the face of unprecedented wildfires, and watching hurricanes tear through her parent’s home on the eastern seaboard, enough was enough; she had to do something. She founded Petra to keep communities lit, safe and connected in the face of natural disasters and climate change. To do this, she resolved to figure out a way to bury the world’s critical infrastructure. What Kim learned was that while burying critical infrastructure protects communities from natural and man-made threats, the world didn’t have the right equipment to do so at scale.
With Petra, Kim founded her second robotics company to build technologies to bury infrastructure at scale. Petra is solving one of the biggest challenges in underground construction: how to bore utility tunnels through all geologies with a single method. After initially backing Petra as an early seed investor at Lemnos Labs, Shivani Torres joined forces as an early co-founder and Chief Product Officer to lead engineering and help Petra build the future of utility infrastructure.”
Kim and Shivani’s backgrounds in mechanical engineering, technology, and finance make them the ideal founding team. They both have what it takes to understand the machinery and market, allowing them to solve a pressing issue while making a viable business out of it.
We are incredibly grateful to work with Kim and Shivani and lend a helping hand to build out Petra. The business is helping solve climate change in an effort to make the world better for all of us. If you have any questions about Petra, please feel free to reach out to us at email@example.com. And leave us feedback if you enjoyed this piece or would like to see another Republic Capital portfolio company highlighted.
This blog post is for informational purposes only and does not constitute an offer to sell, or a solicitation of an offer to buy, any security or instrument in or to participate in any strategy with any Fund. All figures are based on information provided by third-party sources and we cannot guarantee the accuracy or completeness thereof.