This Long Beach startup says it has a patch for California’s power problems

Many companies in California struggle to get enough electricity to power their growing businesses. One Long Beach startup just raised $26 million for what it says is a quick fix for that problem.

There are limits on how much power each company can draw from the public power grid so fast-growing industries can’t just crank up their consumption whenever they want. For uninterrupted supply, they sometimes have to wait for local utilities to build capacity, which can take years.

Critical Loop — an energy tech company based in an office overlooking the Long Beach airport — has already landed major clients and investors with its power management controller. It helps companies get more power when they need it and save money by seamlessly switching between the public grid, batteries and their on-site solar panels and generators.

The company is thriving in California because there is so much unmet need for power, Critical Loop Chief Executive Bala Ramamurthy told The Times.

“The amount of power-hungry industries here in L.A., especially across ports, logistics and manufacturing, is significant,” he said. “California is at the center of many of the grid challenges we’re solving.”

The company announced Tuesday that it has raised $26 million, bringing its total funding to $49 million. The funding was led by Conifer Infrastructure Partners and Hanover.

The startup did not disclose its valuation. It plans to use the money to power sites beyond California, expanding into sites such as data centers and advanced robotics warehouses.

It says it can bring more power to companies much sooner than others, in days or weeks, rather than waiting years for utilities to upgrade local substation and expand capacity.

Founded in 2023, the startups team has grown from eight to 35 people in the past year, with hires from SpaceX, Palantir and Tesla.

The team works out of Donald Douglas Drive in Long Beach, inside a former hangar. In the sprawling space, employees work on assembling and testing hardware, including container-sized batteries and their autonomous controllers.

The firm won a bid to manage peak-load reduction at the San Diego International Airport. During peak operating hours, when all conveyor belts and baggage sorting equipment are running, the airport relies on Critical Loop’s controller to predict and manage on-site battery needs.

It took four months to set up that system, Ramamurthy said.

The startup, effectively helps industries cut their electricity bills. Utilities charge large facilities based on their highest moment of power use in a given month — not their average. For instance, one peak summer afternoon, with every conveyor belt, boarding gate and baggage sorter running at full blast, can set the airport’s electricity rate for the entire month.

Critical Loop’s system switches to on-site batteries and solar during those peak hours, then back to the grid when demand drops, saving the airport millions over years.

The company recently deployed an electric-vehicle charging fleet for the company TerraWatt in just a few months. While the local utility’s upgrade timeline was five years, Critical Loop’s setup enabled the facility to draw power from the grid for most of the year and use on-site batteries to cover peak-constrained hours.

“What’s really compelling about battery-plus-inverter based systems is this ability to deliver power quicker by boosting the available power in concert with the grid,” said Ramamurthy.

It is in a sweet spot right now as the massive buildout of the data centers that power artificial intelligence has created an insatiable demand for quick power solutions, said Taylor McNair, deputy director of Gridlab, a technical think tank.

“In general, there is increased interest in on-site generation and off-grid deployments, particularly for new data centers,” he said.

While some California billionaires and businesses have been leaving the state, Critical Loop’s presence in Southern California has grown. It has a number of projects in Los Angeles County that need extra power but can’t rely solely on the grid.

It chose to set up in Long Beach to be close to high-quality hires as well. Southern California’s engineering talent, especially from companies such as SpaceX, Tesla and other advanced manufacturing and energy players, is difficult to find elsewhere.

“For a company building and deploying real infrastructure, proximity to the problem set, partners and talent needed to solve it matters more” than any drawbacks of working in California, Ramamurthy said. “L.A. delivers on all fronts.”