Venture capitalists have shown varying levels of interest in fusion startups in recent years. While nuclear fusion companies received over $6 billion in investments in 2023, which was $1.4 billion more than the previous year, the growth rate was slower than expected. External factors, such as concerns about rising inflation, have impacted investor confidence. However, despite these challenges, venture interest in fusion technology remains strong as startups explore innovative approaches to harnessing the power of the Sun for safe and limitless energy production.
A significant milestone was reached in 2022 when the Department of Energy’s National Ignition Facility successfully generated a fusion reaction that produced more power than was required to initiate the reaction. This breakthrough demonstrated the feasibility of fusion power and set the stage for further advancements in the field. The latest company aiming to make a mark in fusion energy is Proxima Fusion, a spin-out from the prestigious Max Planck Institute for Plasma Physics (IPP). Based in Munich, Proxima has raised €20 million ($21.7M) in a seed funding round to begin constructing its first generation of fusion power plants.
Proxima Fusion’s technology is based on “quasi-isodynamic (QI) stellarators” using high-temperature superconductors. Stellarators are doughnut-shaped rings of precisely positioned magnets that can contain the plasma needed for fusion energy. However, stellarators are notoriously challenging to build due to their complex magnet configurations and the need for precise engineering. Proxima Fusion claims to have developed a solution to these challenges through a combination of engineering solutions and advanced computing. In 2022, the company was able to address these issues and build on the research conducted by the Max Planck IPP, which constructed the Wendelstein 7-X (W7-X) experiment, the world’s largest stellarator.
One of the key factors enabling this new approach to fusion is the use of artificial intelligence (AI) to simulate the behavior of the plasma. By leveraging AI, Proxima Fusion brings the prospect of viable nuclear fusion closer. Dr. Francesco Sciortino, co-founder and CEO of Proxima Fusion, highlighted the difference between Proxima’s approach and that of another fusion startup, Marvel Fusion, which uses laser containment. While laser containment involves compressing a small pellet and releasing energy via a fusion reaction, Proxima’s stellarator approach allows for continuous operation without explosive releases.
Dr. Sciortino, who completed his PhD at MIT on tokamak nuclear projects, explained that Proxima Fusion will leverage the knowledge gained from the W7-X device, which has received over €1 billion in public investment. He stated that the company aims to achieve fusion energy by the mid-2030s, with the objective of building an intermediate device in Munich around 2031. This timeline aligns with the company’s goal of reaching the mid-2030s for commercial fusion power.
Investors in Proxima Fusion are confident in the company’s potential. Ian Hogarth, a partner at Plural, one of Proxima’s investors, highlighted two compelling factors: the benefits of Proxima’s stellarator technology derived from advancements in high-temperature superconductors and computer-aided simulation, and the advantage of Proxima being the first spin-out from the world’s most advanced stellarator project in North Germany. Hogarth believes that Proxima’s association with the ambitious government project provides a solid foundation for success, leveraging the significant public investment made in the project.
While Proxima Fusion holds promise, it is not the only player in the race for fusion energy. Helion Energy, for example, raised $500 million in a Series E funding round two years ago, attracting investments from tech entrepreneur and OpenAI CEO Sam Altman. Additionally, there are at least 43 other companies actively developing nuclear fusion technologies.
Proxima’s seed funding round was led by Redalpine, with participation from Bayern Kapital, DeepTech & Climate Fonds, and the Max Planck Foundation. Existing investors High-Tech Gründerfonds, Wilbe, UVC Partners, and Tomorrow of Visionaries Club also participated in the round, underscoring the confidence in Proxima Fusion’s potential.
In conclusion, while venture capitalist interest in fusion startups has fluctuated in recent years, the field continues to attract significant investments. Proxima Fusion, as a spin-off from the Max Planck Institute for Plasma Physics, has raised €20 million in a seed round to pursue its innovative approach to fusion power using quasi-isodynamic stellarators. Leveraging advancements in high-temperature superconductors and AI-driven simulation, Proxima aims to achieve fusion energy by the mid-2030s. The company’s association with a groundbreaking government project further strengthens its position in the highly competitive fusion energy landscape. Despite competition from other fusion startups, Proxima’s investors see great potential in its unique approach and technological advancements.
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