Competition in commercial fusion power generation is intensifying.
Investors have poured money into fusion startups in recent years, and one recent beneficiary is Zapp Energy, an Everett, Washington-based startup. The company is pursuing a smart approach to harnessing the power of the stars. According to PitchBook, the company recently closed on $130 million in funding, bringing his total to $327 million, according to SEC filings. Only four fusion startups raised more funds.
The new round was led by Soros Fund Management, with participation from new investors BAM Elevate, Emerson Collective, Mizuho Financial Group, and Xplor Ventures. Existing investors including Breakthrough Energy Ventures, Chevron Technology Ventures, Energy Impact Partners, Lowercarbon Capital and Shell Ventures also rose again. More investors may be named in the future.
A clever irony about fusion power is that it's always been “10 years away,” and perhaps that's still the case. However, recent advances, including the National Ignition Facility breakthrough in 2022, suggest that commercial-scale demonstration may finally be achievable within a decade, so investment The house is getting stronger.
Their motives are clear. This is an opportunity to tap into the multi-trillion dollar global energy market while decarbonizing large parts of the economy.
Although different companies have different policies for producing and controlling fusion reactions, the basic principles are all the same. It involves fusing atomic nuclei using safe and widely available fuel sources and using the resulting power to generate electricity or heat (or both).
Zap's approach can best be described as “lightning in a bottle.” This technique, known as “shear flow-stabilized Z-pinch,” sends an electrical current through the plasma. This interaction creates a magnetic field that compresses the plasma, eliminating the need for expensive magnets and lasers that other companies and researchers have used to create the conditions necessary for fusion.
When the deuterium and tritium isotopes of hydrogen in the plasma fuse, neutrons and heat are released. That energy is absorbed by the molten metal surrounding the reaction chamber and can be used to generate electricity. The zap repeats this process over and over again, similar to igniting a cylinder in an internal combustion engine.
Together, the reactor and molten metal jacket are only 10 feet in diameter and, at commercial scale, produce 50 megawatts of electricity, enough to power about 50,000 to 60,000 homes. For heavy loads, multiple reactors can be installed together, the company said.
The new $130 million in funding is slightly less than the $160 million Series C the company raised in 2022. Several existing investors participated, with two notable exceptions: DCVC and Valor Equity Partners.
Although the round is small, it could help the company prove key parts of its reactor. Like many climate change technology companies that specialize in hardware, Zap is in the midst of what some call the “valley of commercial death.” There, startups that have proven the science and engineering behind their technology work still have to spend a lot of money to bring it to commercial scale.
These days, climate technology investors are grappling with how to navigate uncertain terrain as the most promising portfolio companies enter the valley. Some point to corporate venture capital as an option, while others point to growth equity and project finance as solutions. The addition of Soros Fund Management and continued support from Chevron Technology Ventures, Breakthrough Energy Ventures and others suggest Zapp still has support from a wide range of investors.