Zanskar has secured $115 million in Series C funding to advance what it describes as the largest geothermal exploration and development campaign underway in the United States, positioning the Salt Lake City-based company at the intersection of two critical infrastructure challenges: the urgent need for reliable, clean firm power to support data center expansion and the limitations of conventional geothermal discovery methods. Spring Lane Capital led the financing round, bringing Zanskar’s total equity raised to $180 million and enabling the company to transition from pure exploration into commercial power generation.
Founded in 2021, Zanskar applies machine learning and large-scale data analysis to identify naturally occurring geothermal resources that traditional exploration methods have overlooked. The company’s AI-powered platform has already confirmed multiple previously unknown geothermal systems across the western United States, with subsequent deep drilling indicating these resources can produce significantly more energy than initial estimates suggested. The new capital will support construction of multiple geothermal power plants expected to deliver electricity before 2030, while expanding the company’s discovery platform and exploration drilling programs.
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Addressing the Conventional Geothermal Discovery Challenge
The United States currently operates approximately 2.5 gigawatts of geothermal generating capacity, nearly half of which came online during the 1980s, with development constrained by the inherent risks and costs of locating suitable hydrothermal resources. Traditional geothermal exploration has focused on visible surface manifestations such as hot springs, geysers, or volcanic activity, leaving vast potential resources undiscovered because they lack obvious surface indicators. Zanskar estimates that approximately 95 percent of all geothermal systems are “blind”—meaning they have no telltale surface features—creating an enormous untapped resource base that conventional methods systematically missed.
Carl Hoiland, Zanskar’s CEO and co-founder, explained the company’s founding thesis: “We started Zanskar with the belief that AI would have as profound an impact on geothermal cost and scalability as modern drilling technologies have. It would do so by enabling us to find more hidden geothermal systems, and to produce more power from each of those systems, than legacy models assumed. The result is a terawatt-scale opportunity.” The company’s recent announcement of Big Blind, a major geothermal discovery in western Nevada with no visible surface activity, validates this approach and represents the first blind geothermal system discovered by industry in the United States in over 30 years.
Zanskar’s exploration methodology combines supervised machine learning models trained on past accidental discoveries with multiple data layers including subsurface datasets, modern satellite and remote sensing imagery, and field inputs from the company’s geoscience team. The platform uses these inputs to pinpoint promising exploration sites and even guide drilling direction and angle. Once a potential resource is identified, the company employs Bayesian evidential learning—an AI approach specifically developed for this application—to build and test hypotheses about subsurface conditions, using a proprietary geothermal simulator to fill data gaps.
Record Year of Discoveries Validates Technology Platform
Zanskar’s 2025 exploration campaign yielded results that substantially exceeded industry norms and established the company’s technological credibility with investors. The company successfully identified resources at three consecutive target sites, a “three of three” hit rate that co-founder and CTO Joel Edwards emphasized as exceptional for geothermal exploration. Beyond Big Blind in Nevada, Zanskar’s portfolio includes the turnaround of the Lightning Dock asset in New Mexico—now described as the most productive pumped geothermal well in the United States—and discoveries at Pumpernickel Valley in northern Nevada, where exploratory drilling had occurred for decades without commercial development.
These successes have established proof points that conventional geothermal deserves reconsideration as a scalable energy resource. James Faulds, a professor and geologist at the University of Nevada, Reno, noted the sector’s potential: “There’s just huge potential there. It could be many tens or hundreds of gigawatts of energy.” This assessment aligns with Zanskar’s internal estimates showing a pipeline capable of supporting at least one gigawatt of generating capacity from sites already identified, with potential for substantially more as the company continues systematic exploration of geothermally-rich regions.
The company’s approach has delivered discovery timeframes and costs that collapse relative to industry best practices, establishing Zanskar as what it describes as the leading geothermal exploration company by anomaly identification rate. This track record proved critical in attracting the substantial Series C investment, as it demonstrates that the company’s technology platform can identify commercial-scale resources with acceptable risk profiles for project financing.
Strategic Investor Confidence in Geothermal’s Grid Role
The composition of Zanskar’s Series C round reflects broad institutional recognition that geothermal can play a strategic role in grid decarbonization and reliability. Spring Lane Capital led the financing and will join Zanskar’s board, with Jason Scott, Partner and Entrepreneur in Residence at the firm, explaining the investment rationale: “We are eager to support Zanskar because we believe there is a near infinite demand for firm, clean power around the world right now and geothermal energy is one of the only immediate ways to serve this enormous market. Zanskar is unique in that they have identified more geothermal anomalies in North America than any other company in decades.”
The round included participation from existing investors Obvious Ventures, which led Zanskar’s Series B, alongside Union Square Ventures and Lowercarbon Capital, which co-led the Series A. More than a dozen additional strategic and institutional investors joined, including Munich Re Ventures, Susquehanna Sustainable Investments, Clearvision Ventures, Orion Industrial Ventures, StepStone Group, UP Partners, Cross Creek, and others. Andrew Beebe, Managing Director at Obvious Ventures, framed geothermal as infrastructure that serves both climate and competitiveness objectives—a positioning that resonates as grid reliability concerns intensify.
The size of this funding round marks it as the largest venture investment to date in AI-enabled geothermal resource discovery, signaling what the company characterizes as a decisive shift in market confidence toward the commercial potential of undiscovered, naturally-occurring geothermal systems. This capital will support what Zanskar describes as one of the most extensive geothermal exploration and development campaigns in U.S. history, with the company planning to build, own, and operate high-grade geothermal assets as core infrastructure for the modern grid.
Data Center Demand Drives Clean Firm Power Premium
Zanskar’s commercial positioning benefits from powerful secular trends in electricity markets, particularly the explosive growth in data center power demand driven by artificial intelligence workloads. Global data center electricity consumption is projected to double to approximately 945 terawatt-hours by 2030, reaching nearly 3 percent of total global electricity consumption. A typical AI-focused hyperscale data center annually consumes as much electricity as 100,000 households, with larger facilities under construction expected to use 20 times that amount.
This demand surge creates acute challenges for grid operators and hyperscale technology companies. Data centers require clean “firm” power—electricity available on demand with low risk of outage—to operate their 24/7 computing infrastructure. While wind and solar can provide renewable energy attributes, their intermittent generation profiles create reliability gaps that data center operators must address through backup power, energy storage, or firm generation sources. Geothermal’s baseload characteristics make it particularly valuable for this application.
Geothermal power plants deliver capacity factors typically around 90 percent, meaning they can operate at maximum capacity nearly all the time. This performance substantially exceeds wind and solar alternatives and positions geothermal alongside nuclear power as one of the few renewable resources capable of providing around-the-clock generation. The Department of Energy notes that this high capacity factor allows geothermal to balance intermittent renewable sources, making it a critical component of grid decarbonization strategies.
Zanskar anticipates that data centers will be among its first major customers, with hyperscalers likely contracting through utilities to secure the clean energy attributes of grid-connected geothermal power. CEO Hoiland believes Zanskar’s clean, firm, low-cost power will help draw the data center industry toward geothermally-rich states such as Utah and Nevada, where the company is concentrating its development efforts. This geographic alignment addresses a strategic constraint facing hyperscalers: power availability has become the primary limiting factor for data center site selection, displacing traditional considerations like latency and fiber connectivity.
Transition from Exploration to Project Development
The Series C funding enables Zanskar to execute what Diego D’Sola, the company’s head of finance, described as a “six power plant execution plan” over the next three to four years. This buildout is projected to generate more than $100 million of revenue by the end of the decade while unlocking a multi-gigawatt pipeline behind the initial plants. The transition from exploration to construction represents a critical inflection point, as Zanskar moves from demonstrating technical capability to proving commercial viability and operational execution.
D’Sola indicated the company expects to close its first project financing this quarter, explaining that the ambitious development plans require “north of $600 million in total capital expenditures, the vast majority of which will come from non-dilutive sources or project level financing.” This capital structure reflects standard infrastructure development patterns, where equity from venture investors proves the concept and attracts substantially larger pools of project debt and infrastructure equity as assets approach commercial operation.
Zanskar now occupies what Spring Lane Capital identified as the “missing middle” of climate finance—the stage at which a startup has matured beyond early-stage venture backing but remains too risky for traditional infrastructure investors. Successfully navigating this transition requires demonstrating not just resource discovery but also permitting capabilities, grid interconnection execution, construction management, and ultimately operational performance. The company’s plans to develop, build, own, and operate assets positions it to capture the full value chain from exploration through power generation, though this integrated approach also concentrates execution risk.
The geographic focus on the western United States aligns with both geological favorability and grid market dynamics. California alone needs approximately 5,750 megawatts of installed geothermal capacity by 2030 to achieve state renewable energy targets, while Nevada, Utah, Oregon, and Idaho all offer substantial geothermal potential with supportive regulatory frameworks. The western grid also faces acute reliability challenges as aging fossil fuel plants retire and variable renewable penetration increases, creating market opportunities for firm clean generation.
Conventional vs. Enhanced Geothermal Technology
Zanskar’s focus on conventional geothermal resources distinguishes it from competitors pursuing enhanced geothermal systems (EGS), which use hydraulic fracturing techniques adapted from oil and gas drilling to create artificial geothermal reservoirs in hot dry rock. Companies like Fervo Energy have attracted substantial investment for EGS development, with Fervo raising approximately $1.5 billion to deploy these technologies. The enhanced approach theoretically allows geothermal development almost anywhere with sufficient subsurface temperatures, eliminating the geographic constraints that limit conventional resources.
However, conventional geothermal offers distinct advantages that inform Zanskar’s strategic positioning. Naturally occurring hydrothermal systems require less intensive reservoir creation, potentially reducing both development costs and induced seismicity risks associated with rock fracturing. Zanskar argues that its AI-enabled discovery platform not only reduces exploration risk but also identifies fields that can be developed more economically than engineered reservoirs. The company’s model focuses on finding high-quality natural systems that conventional methods missed rather than creating new systems through drilling and fracturing.
This technological debate reflects broader questions about geothermal’s development pathway. The U.S. Department of Energy’s GeoVision analysis and subsequent Enhanced Geothermal Shot program have emphasized EGS as the route to unlocking vast geothermal potential beyond traditional hydrothermal areas. However, as Hoiland noted, these estimates may have substantially underestimated both the number of undiscovered conventional systems and the energy that can be extracted from them using modern drilling techniques. If Zanskar’s exploration results prove representative of broader western U.S. geology, conventional resources could deliver significant capacity without the technical complexities of reservoir engineering.
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Market Structure and Policy Context
Zanskar enters commercial development as geothermal energy receives renewed policy attention and market interest. The Inflation Reduction Act renewed and expanded federal production tax credits for geothermal electricity generation, providing up to 2.75 cents per kilowatt-hour. Twenty-five states and the District of Columbia include geothermal as an approved resource to meet renewable portfolio standards, with several western states offering additional incentives for baseload renewable generation.
Grid operators are increasingly recognizing the value of firm renewable generation as they confront reliability challenges from thermal plant retirements and renewable integration. California’s Public Utilities Commission specified development of 1,000 megawatts of renewable generation at 80 percent or greater capacity factor in its 2021 procurement order, a requirement that strongly favors geothermal over wind or solar alternatives. Similar grid reliability procurements in other western states create expanding market opportunities for proven geothermal resources.
The power purchase agreement market for geothermal has strengthened substantially in recent years, with 11 new agreements signed between 2019 and 2022 across four states. Recent contracts show pricing ranging from $77 to $202 per megawatt-hour, with one Fervo-NV Energy deal at $107 per megawatt-hour demonstrating competitiveness with other firm power sources. While these rates exceed current wind and solar pricing, they compare favorably to other baseload alternatives when considering capacity factors and avoided integration costs.
Permitting and interconnection processes remain key challenges for all electricity generation projects. Grid interconnection queues have extended to approximately five years, filled primarily with wind and solar projects. Geothermal projects face additional permitting complexity related to subsurface resource rights, though their high capacity factors and small land footprint can accelerate approval in some jurisdictions. Zanskar’s focus on developing resources it has already identified may provide advantages over competitors still conducting initial exploration, as environmental reviews and grid studies can proceed in parallel with final site characterization.
Operational Economics and Resource Lifetime
Geothermal power projects carry higher upfront capital costs than wind or solar alternatives, typically ranging from $3,000 to $6,000 per kilowatt compared to $1,700 to $2,100 per kilowatt for onshore wind or utility-scale solar. However, geothermal’s superior capacity factors and low operating costs substantially improve lifetime economics. Modern geothermal plants deliver capacity factors upward of 90 to 95 percent, allowing them to generate far more electricity per unit of installed capacity than intermittent renewables.
Operating costs for geothermal facilities remain low once construction is complete, with minimal fuel expenses and predictable maintenance requirements. The resource base itself provides value durability that distinguishes geothermal from wind and solar projects. While turbine and panel efficiencies may improve over time, the geothermal reservoir itself can produce for decades with appropriate management. Some existing U.S. geothermal plants have operated continuously since the 1980s, demonstrating resource longevity that supports long-term project financing.
Zanskar’s discovery results suggest that reservoir productivity may exceed historical assumptions when modern drilling techniques access larger resource volumes. The company’s assertion that systems can produce far more energy than expected implies potential for higher capacity factors or longer operating life than conventional geothermal modeling predicted. This performance upside, if validated at commercial scale, could significantly improve project returns and accelerate development of additional sites in the pipeline.
Resource sustainability requires careful reservoir management to avoid over-extraction that depletes the hydrothermal system faster than geological processes can replenish it. Industry experience demonstrates that sustainable production rates can be maintained through reservoir monitoring and injection strategies that return spent fluids to the formation. Zanskar will need to demonstrate not just initial productivity but also sustained output over multi-decade plant lifetimes to secure the long-term power purchase agreements that optimize project economics.
Workforce and Supply Chain Development
Scaling geothermal development from Zanskar’s current portfolio to the multi-gigawatt pipeline the company envisions requires substantial expansion of specialized workforce capabilities and supply chain capacity. The geothermal industry has remained relatively small for decades, with limited drilling activity outside a few concentrated regions. Rapid capacity growth will require recruiting and training geothermal engineers, reservoir specialists, drilling crews, and plant operators while expanding supplier relationships for specialized equipment.
Zanskar’s integrated approach—owning and operating plants rather than selling discovered resources to third-party developers—increases the company’s exposure to these operational scaling challenges. The company must build not just exploration capabilities but also project development, construction management, plant operations, and asset management functions. This organizational complexity explains the company’s substantial hiring across engineering, development, and finance roles as it transitions from exploration startup to power generation company.
Supply chain considerations span multiple categories including drilling equipment and services, power plant components, grid interconnection infrastructure, and ongoing maintenance requirements. The oil and gas industry provides deep capabilities in many relevant drilling technologies, though geothermal’s higher temperatures and corrosive fluids create specialized requirements. Plant equipment procurement benefits from established geothermal turbine and binary cycle system suppliers, though long lead times for major components can constrain development schedules.
The company’s concentration in the western United States provides access to established geothermal service infrastructure in Nevada and California, where industry knowledge and specialized contractors remain available despite limited new development over recent decades. This regional clustering effect reduces some scaling challenges while creating potential bottlenecks if multiple developers compete for limited specialized resources during simultaneous construction campaigns.
Investment Returns and Exit Pathways
Venture investors in Zanskar are backing a capital-intensive infrastructure business with long development timelines and return profiles substantially different from typical software or biotechnology investments. The company’s path to delivering returns likely involves either building a portfolio of operating assets that generate stable cash flows suitable for infrastructure investors, or developing projects to commercial operation and selling them to utilities or independent power producers.
The growing market for clean firm power creates multiple potential exit pathways. Utilities seeking to meet renewable energy mandates and grid reliability requirements represent logical acquirers for proven geothermal assets. Independent power producers with expertise operating renewable generation portfolios could value Zanskar’s developed projects for their stable production and long-term contracted revenues. Infrastructure funds increasingly allocate capital to renewable energy infrastructure, particularly assets delivering predictable cash flows supported by long-term power purchase agreements.
Alternatively, Zanskar could pursue a strategy of retaining developed assets and optimizing the company for an eventual sale to a strategic acquirer or infrastructure investor based on a portfolio of operating plants. This approach requires patient equity capital willing to fund development through commercial operation but potentially delivers higher valuations if the company successfully executes across multiple projects and demonstrates operational excellence.
The Series C financing sets valuation expectations that likely require substantial project execution success to generate attractive venture-scale returns. While the company did not disclose valuation, the $180 million total equity raised implies the need to either build significant operating cash flow or create a portfolio of development-stage and operating assets valued substantially above invested capital. The scale of Zanskar’s identified pipeline suggests potential to achieve these outcomes if exploration success translates to construction execution and operational performance.
Broader Implications for Geothermal Sector
Zanskar’s progress carries significance beyond individual company success, potentially catalyzing broader reconsideration of conventional geothermal’s role in clean energy transitions. If AI-enabled exploration methods substantially reduce discovery risk and cost while identifying larger resource bases than previously assumed, the conventional geothermal sector could experience renaissance after decades of stagnation. This outcome would complement enhanced geothermal development rather than substituting for it, with different technology approaches optimized for different geological settings.
The company’s results may influence Department of Energy research priorities and funding allocations between conventional and enhanced geothermal programs. Current policy emphasis on enhanced systems reflects assumptions about conventional resource limitations that Zanskar’s discoveries challenge. Balanced support for multiple technological approaches could accelerate overall geothermal deployment by pursuing opportunities across the full spectrum from undiscovered natural systems to engineered reservoirs.
International implications also merit consideration, as many countries with active geothermal programs face similar exploration challenges identifying blind systems. Zanskar’s methods could potentially transfer to volcanic regions in Southeast Asia, East Africa’s Rift Valley, and Latin American geothermal provinces where traditional exploration may have overlooked resources. The company has indicated interest in expanding beyond the U.S. West once it establishes domestic operations, though near-term focus remains on executing the identified American pipeline.
Investor enthusiasm for Zanskar may catalyze additional venture capital flows into geothermal technologies, both exploration methods and plant optimization approaches. The sector has received relatively limited cleantech investment compared to solar, wind, and battery storage, partly due to perceived high risks and capital intensity. Demonstrated success reducing exploration risk through AI and data analysis could shift investor perceptions and attract new capital to other geothermal innovators pursuing different technical approaches.
Execution Challenges and Risk Factors
Despite substantial progress, Zanskar faces execution risks common to capital-intensive infrastructure development. The company must demonstrate it can move discoveries from exploration through permitting, financing, construction, and operation at the pace and cost its business plan requires. Delays in any phase could consume capital faster than anticipated and push revenue generation beyond investor patience horizons.
Grid interconnection queues present material timeline risk, potentially adding years between resource confirmation and power delivery. While geothermal’s firm generation characteristics may receive prioritization in some markets, interconnection processes remain complex and often unpredictable. Zanskar’s development timeline assumes resolution of these issues, but extended delays could significantly impact project economics and company financing requirements.
Resource performance risk persists until plants achieve sustained commercial operation. While exploration results appear promising, predicting long-term reservoir behavior from initial well testing involves substantial uncertainty. Actual sustained production rates, resource lifetime, and maintenance requirements will only be fully validated through years of operating experience. Lower-than-expected performance at early projects could undermine confidence in resource estimates for the broader pipeline.
Commodity price exposure creates both opportunities and risks. While power purchase agreements can lock in long-term pricing, negotiating these contracts requires alignment with utility procurement cycles and competitive dynamics with other generation alternatives. Periods of low wholesale electricity prices or abundant renewable energy supply could reduce the premium buyers will pay for firm generation attributes.
Looking Forward: Path to Commercial Scale
As Zanskar progresses from Series C fundraising to actual project construction, the company faces the critical transition from exploration success story to operational power generation company. The next 12 to 18 months will likely determine whether early discoveries translate to projects that break ground, interconnect to the grid, and begin delivering electricity on schedule and budget. Success in this phase validates not just the discovery platform but the integrated business model.
Hoiland’s vision of a terawatt-scale opportunity remains aspirational until Zanskar demonstrates it can systematically develop the resources it has identified. The company’s assertion that it is “ushering in a new wave of clean, firm, geothermal power” will be tested through construction execution, cost control, and ultimately the reliability and economics of operating plants. Early project performance will substantially influence whether additional project financing and infrastructure capital become available to fund the multi-gigawatt pipeline the company has outlined.
The convergence of AI capability, data center power demand, and grid reliability imperatives creates unprecedented conditions for geothermal development. Whether Zanskar successfully capitalizes on these trends to build a significant geothermal generation company remains to be demonstrated, but the $115 million Series C provides the resources to make the attempt. For investors, policymakers, and grid operators watching this space, the company’s progress over the coming years will offer important evidence about conventional geothermal’s potential contribution to clean energy transitions in the United States and potentially globally.
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By: Montel Kamau
Serrari Financial Analyst
27th January, 2026
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