Last week German fusion startup Proxima Fusion hit the headlines when it announced it had raised a €130m Series A round — the largest funding round for a European fusion startup.
The round was, perhaps surprisingly to those of us who’ve been reporting on fusion startups, led by Cherry Ventures and Balderton, mainstream VCs usually focused on winning the venture game with software.
When did fusion technology ever become a VC case? Apparently, now it seems. And there’s public money behind it.
In the last couple of years, large European countries have set aside money or made promises to back the technology, which promises a near-limitless amount of cheap, clean energy.
Last week, the UK government pledged £2.5bn for fusion research over the next five years. In late 2023, French president Emmanuel Macron promised major investments in fusion technology as part of a broader €54bn investment plan.
Germany wants the first fusion reactor to be built in the country and plans to ramp up spending on the tech with a €390m fusion initiative.
As with all technology, where hype goes, money follows. According to a report published in February by industry intelligence platform FusionX, committed equity and non-dilutive capital globally reached $12.6bn at the end of last year.
“There’s a lot of ecosystem momentum right now,” says Proxima cofounder Martin Kubie.
The problems of instability and energy leakage
Fusion has seen plenty of breakthroughs, with a major one announced in December 2022, when the National Ignition Facility (NIF) at Lawrence Livermore National Laboratory in the US reached “scientific breakeven” — it managed to demonstrate a small net energy gain at its laser fusion facility.
The accomplishment of producing more energy than was put in showed that progress is possible and that it is now only a matter of time (hopefully less than 20 years) before the gain is 10x that. But there are still issues at work before companies can start planning commercial scale.
There are two reasons we still haven’t seen an effective fusion solution: stability and energy leakage.
Inertial confinement fusion (ICF) is the fusion energy process that initiates nuclear fusion reactions by rapidly compressing and heating hydrogen fuel capsules until they form plasma — an extremely hot, charged state of matter — which replicates the conditions of the sun. It’s a process that can be disrupted by unstable plasma behaviour, which lowers the energy output.
The sector has been helped by several breakthroughs in recent years and the latest use of AI in fusion tech has made it more accessible for investors, according to Filip Dames, partner at Cherry Ventures.
“On top of [the 2022 breakthrough], high-temperature superconducting magnets are enabling more compact designs, AI is speeding up development dramatically and advanced manufacturing is making it easier to build complex components,” says Dames.
Revamped technologies
One of the startups that has been working on fusion is Sweden’s Novatron Fusion Group (NFG), a startup developing a magnetic mirror fusion reactor, which confines hot plasma using magnetic fields that reflect charged particles back and forth between two magnetic “mirror” points, preventing them from escaping.
The technology was more or less abandoned in the 1980s because researchers couldn’t find a way to limit significant plasma losses or instabilities. Instead, there was a shift towards tokamaks — doughnut-shaped reactors that use magnetic fields to confine hot plasma in a toroidal (ring-like) chamber for nuclear fusion — and other fusion technologies.
Earlier this month, though, the company said it had found a way to solve the instability issue, CEO Peter Roos tells Sifted.
“We’ve found the final piece of the puzzle that was missing to achieve stable plasma confinement. And this is something no one else has,” he says. And why is that important? “Because if you don’t have stable confinement, you can’t run a continuous process — it just stops.”
NFG’s founder Jan Jäderberg found a way to address plasma containment through a “triple-force” confinement approach, combining three mechanisms to reduce energy losses and to keep the plasma contained, potentially giving the “magnetic mirror” reactor an efficiency boost of up to 1,000 times.
“If you can shape the magnetic fields in the right way, you can essentially create a kind of magnetic bowl, with the plasma wobbling around inside it. It can be as rowdy and chaotic as it likes, but it still stays inside the bowl. That’s what the Novatron (the machine) does,” Roos says.
Proxima Fusion, which has been doing lots of its work using simulators, said that recent advances in AI have led to rapid increases in the speed of simulation technology. In February, it announced “the world’s first blueprint for a commercial power plant” based on the Wendelstein 7-X, an experimental stellarator reactor in Greifswald, Germany.
“The turning point was the 2022 results from Wendelstein 7-X, which showed that stellarators can be built with the precision needed and that theory aligns with experimental data,” Dames says.
For Proxima’s cofounder Martin Kubie, using the technologies already proven by the W7-X is giving the company an advantage over competitors.
“We’re not setting out to demonstrate a new concept, we’re not setting out to prove a new idea, but we’re setting out to demonstrate that our proven idea can be scaled and commercialised,” cofounder Martin Kubie says.
With a maturing ecosystem in Europe and more milestones within fusion being hit, the tech is becoming more approachable for a broader set of investors, according to Dames.
“Fusion used to feel too far off or too speculative, but that’s changing. It’s becoming less about fundamental science and more about engineering execution — something generalist VCs are quite comfortable with,” says Dames. “If you think about companies like SpaceX or The Exploration Company, there’s a clear parallel.”
Sifted has listed the best-funded European startups of each reactor type available.
The key European fusion startups
Marvel Fusion, Munich
Founded: 2019 by Moritz von der Linden
Number of employees: 80
Type of reactors: Inertial fusion using lasers
Capital raised: €385m, of which €175m is in equity and the rest in public cooperation projects
Notable investors: HV Capital, EQT Ventures and Earlybird Venture Capital
Marvel Fusion is building inertial fusion energy technology. Instead of using strong magnetic fields, Marvel uses a laser-based approach to fusion more in line with the technology pioneered at the National Ignition Facility (NIF).
According to its director of corporate affairs, Saskia Horsch, laser-based inertial confinement fusion has some significant advantages over magnetically confined fusion. The “development cycles are faster, as laser-based systems are operated and scaled as modular individual systems, and experiments and technological iterations can be implemented more quickly,” she says, and points out that only laser fusion has so far demonstrated a positive energy gain.
The company is now building a laser facility that is planned to be ready by 2027 and will be used to prove that its laser system works. The next step is to construct a prototype fusion power plant, preferably in Germany, to be up and running in the early 2030s.
Tokamak Energy, Oxford
Founded: 2009 by Mikhail Gryaznevich and David Kingham
Number of employees: 280
Type of reactor: Magnetic confinement tokamak
Capital raised: $335m ($275m from private investors and $60m in government grants)
Notable investors: L&G Capital, Hans-Peter Wild and Lingotto Investment Management
Tokamak Energy was founded as a spinout from the UK Atomic Energy Authority and has since been working on two transformative technologies: the compact spherical tokamak and high-temperature superconducting (HTS) magnets.
“Our spherical tokamak design is more efficient than the traditional ring doughnut shape, with lower capital investment, operating costs, and a smaller footprint,” says Stuart White, a spokesperson for Tokamak Energy.
Tokamak Energy is partnering with the UK, US and Japanese governments on fusion programmes to deliver energy through fusion while working on its high-temperature superconducting magnets.
By also focusing on commercialising superconducting magnetics, Tokamak Energy says it has already made technological advances that are already benefitting industry, and that its tech will enable commercial fusion energy in the next 15 years.
Proxima Fusion, Munich
Founded: 2023 by Francesco Sciortino, Lucio Milanese, Jorrit Lion, Jonathan Schilling and Martin Kubie
Number of employees: 90
Type of reactor: Magnetic confinement stellarator
Capital raised: €185m
Notable investors: Cherry Ventures, Balderton Capital, Lightspeed, Redalpine and Plural
Proxima Fusion, a spinout from the Max Planck Institute for Plasma Physics (IPP), leverages the W7-X stellarator design but applies advanced simulation, AI-driven design and next-generation magnets to significantly improve power output and make its own fusion machine commercially viable.
“W7-X is the only large-scale fusion experiment that’s been able to operate in this stable, steady-state condition,” Kubie says, but adds that it has a number of limitations. However, with the use of new technologies, most of those can be solved for Proxima’s own reactors, he adds.
“That’s why we talk a lot about simulation-driven design, or data-first or AI-driven engineering. It’s a way to address how to build the next step machine when you can’t do a series of five or six to get there,” Kubie says.
The company hopes to be able to demonstrate a large-scale magnet prototype by early 2027, achieve net energy production with a demonstration stellarator by 2031 and target a commercial-scale fusion power plant in the latter part of the 2030s, with the goal of producing a gigawatt of net electricity.
Focused Energy, Darmstadt
Founded: 2021
Number of employees: 49 (PitchBook data)
Type of reactor: Inertial confinement using lasers
Capital raised: $97m (PitchBook data)
Notable investors: Prime Movers Lab, SGInnovate and VCP Capital
Focused Energy, a spinout of the University of Darmstadt and National Energetics, is developing laser-driven inertial fusion energy, building on the science of the National Ignition Facility (NIF). It aims to develop the world’s first commercial fusion energy system using deuterium-tritium fuel, as demonstrated at the Lawrence Livermore National Laboratory in 2022.
Late last year, Focused Energy announced plans to construct a state-of-the-art Laser Development Facility in the San Francisco Bay Area. The facility, which will also serve as the company’s US headquarters, is currently under development.
Renaissance Fusion, Grenoble
Founded: 2020 by Francesco Volpe and Martin Kupp
Number of employees: 70
Type of reactor: Magnetic confinement stellarator
Capital raised: €60m in total, including a €10m grant from BPI France
Notable investors: Lowercarbon Capital, Norrsken VC, Crédit Mutuel Alliance Fédérale
Renaissance Fusion is building a stellarator with simplified HTS coils that look like engraved cylinders and face the plasma with thick layers of flowing liquid metal to cope with the extreme conditions of fusion, and is said to be on track to deliver fusion in the 2030s.
The plan for the company is to become the first producer of ultra-wide or long high-temperature superconductors (HTS). HTS is essential for compact fusion reactors, and the only material that can revolutionise energy production (via fusion and wind energy), energy transmission (via superconducting grids) and energy storage.
Renaissance is now working on the development of a tabletop stellarator in corrugated copper and then has plans for a full module of its stellarator reactor.
First Light Fusion, Oxford
Founded: 2011 by Nick Hawker and Yiannis Ventikos
Number of employees: 90
Type of reactor: Inertial fusion using a projectile
Capital raised: £78m
Notable investors: Tencent Holdings and Oxford Science Enterprises
First Light Fusion (FLF), a spinout from Oxford University, is developing a fusion target that also includes an amplifier which helps create the conditions required for a fusion reaction and differentiates the company from others.
The concept was first demonstrated in November 2021, when a fusion reaction was achieved using this target technology. By enabling the use of lower input power, the design may help address some of the key engineering challenges in building an inertial fusion power plant, particularly those related to driver efficiency and system complexity.
In March, FLF pivoted towards partnerships with other fusion companies to help it develop its technology more quickly, more cheaply and at lower risk to improve their targets. This means FLF will no longer aim to build its own fusion plant.
According to FLF, fuel amplifiers represent about 20% of the inertial fusion value chain.
Novatron Fusion Group, Stockholm
Founded: 2019 by Jan Jäderberg and Erik Odén
Number of employees: 70
Type of reactor: Magnetic confinement mirror cusp
Capital raised: €24m
Notable investors: Energy company St1, Axon Partners Group and Industrifonden
Novatron Fusion Group has close ties to the KTH Royal Institute of Technology, where it has its fusion prototype set up. The company is a magnetic mirror fusion reactor startup (the only one in the Nordics) and is based on the technology concept popular in the 1980s that has recently reappeared due to recent discoveries. Since the beginning of the year, the company has conducted experiments that have gradually confirmed stable plasma confinement
This has opened up the possibility to bring the technologies from the past into the present, according to Roos, who showed off the company’s prototype machine last week.
“We have a roadmap with four machines. This is the first of the four. The goal of this machine is to show, even experimentally, that stable plasma confinement is possible — something no one else has managed,” Roos says.
It is now planning the construction of its next machine, where energy leakage will be addressed. “It will effectively be our proof of concept.”
The plan is to have Novatron 2 ready in 2028, and Roos estimates that the company will have grown to around 150–200 employees by then.
Correction: A previous version of this article stated that Novatron Fusion Group had provided proof of achieving stable plasma confinement in its machine — it has not. The article also stated that the company had started constructing its next machine, but it is still only in the planning stage. The article also previously stated that Plural is an investor in Marvel Fusion; it is in fact an investor in Proxima Fusion.
Read the orginal article: https://sifted.eu/articles/fusion-fever-europes-startups-race-to-power-the-future/
