Commonwealth Fusion Systems (CFS), a fusion power startup, has secured $863 million in funding from a diverse group of investors. The investment round included participation from Nvidia, Google, Breakthrough Energy Ventures, and others. This financial infusion aims to accelerate CFS’s efforts to commercialize fusion energy technology, according to company executives.
Bob Mumgaard, co-founder and CEO of Commonwealth Fusion Systems, addressed reporters, stating, “We’re continuing our trend here of looking into the world and saying, ‘How do we advance fusion as fast as possible?’” Mumgaard emphasized that the funding is specifically targeted at transforming fusion from a theoretical concept into a viable commercial and industrial enterprise. He highlighted the importance of translating the potential of fusion into practical applications.
With this latest round of funding, the Massachusetts-based company has now raised nearly $3 billion in total, making it the most well-funded fusion startup to date. In 2021, Commonwealth Fusion Systems secured $1.8 billion in a previous funding round. These substantial investments reflect the growing confidence in the potential of fusion energy as a clean and sustainable power source.
Fusion power has long been envisioned as a potentially limitless source of energy. However, it is only in recent years that investors have begun to seriously consider it as a viable investment opportunity. Advances in computing power and artificial intelligence have accelerated the pace of research and development in the field, leading to increased interest from both startups and investors.
The fundamental principle behind fusion energy involves compressing and heating atoms to such an extent that they form plasma, a fourth state of matter. When the plasma reaches a critical temperature and pressure, the atoms begin to fuse together, releasing vast quantities of energy in the process. This process mirrors what occurs within the core of the sun and other stars.
CFS is currently focused on constructing a prototype fusion reactor called Sparc, located in a suburb of Boston. The company anticipates activating Sparc sometime next year, with the goal of achieving scientific breakeven by 2027. Scientific breakeven is a crucial milestone in fusion research, representing the point at which the fusion reaction generates more energy than is required to initiate and sustain it.
While Sparc is not designed to supply electricity to the power grid, its significance to CFS’s overall strategy is paramount. According to Saskia Mordijck, an associate professor of physics at the College of William and Mary, “There are parts of the modeling and the physics that we don’t yet understand.” Mordijck added, “It’s always an open question when you turn on a completely new device that it might go into plasma regimes we’ve never been into, that maybe we uncover things that we just did not expect.” These statements highlight the inherent uncertainties and potential for unexpected discoveries in cutting-edge fusion research.
Assuming that Sparc does not encounter any major technical obstacles during its operation, CFS plans to commence construction on Arc, its commercial-scale power plant, in Virginia, starting in 2027 or 2028. This timeline represents the company’s ambitious roadmap for transitioning from prototype development to commercial energy production.
Both the Sparc and Arc designs are based on the tokamak concept, a specific type of fusion reactor that utilizes powerful superconducting magnets to confine and compress plasma. Tokamaks have been extensively studied and developed within the fusion research community for decades. The utilization of this established technology allows CFS to build upon existing knowledge and infrastructure.
Mordijck commented, “We know that this kind of idea should work. The question is naturally, how will it perform?” This statement encapsulates the central challenge facing CFS and other fusion energy companies: translating theoretical understanding into practical and efficient energy generation.
The extensive list of investors in the Series B2 funding round suggests a strong level of confidence in CFS’s approach. Ally Yost, CFS’s senior vice president of corporate development, indicated that no single investor led the round. Yost also stated that several existing investors chose to increase their stakes in the company, demonstrating continued commitment to CFS’s long-term goals.
Among the existing investors that increased their investments are Breakthrough Energy Ventures, Emerson Collective, Eni, Future Ventures, Gates Frontier, Google, Hostplus, Khosla Ventures, Lowercarbon Capital, Safar Partners, Eric Schmidt, Starlight Ventures, and Tiger Global. The participation of these prominent investment firms underscores the broad appeal of fusion energy as a potential solution for global energy challenges.
New investors in this round include Brevan Howard, Morgan Stanley’s Counterpoint Global, Stanley Druckenmiller, FFA Private Bank in Dubai, Galaxy Interactive, Gigascale Capital, HOF Capital, Neva SGR, Nvidia’s NVentures, Planet First Partners, Woori Venture Partners US, and a consortium of 12 Japanese companies led by Mitsui & Co., Ltd. and Mitsubishi Corporation. The diversity of these new investors, spanning various sectors and geographic regions, highlights the widespread interest in fusion energy technology.
CFS’s ability to attract such a broad base of investors may prove advantageous as the company establishes its supply chain and identifies partners for the construction of its power plants and the purchase of electricity generated. To date, CFS has entered into an agreement with Google to supply 200 megawatts of power from Arc. This agreement represents a significant step toward commercializing fusion energy and integrating it into existing energy infrastructure.
Mordijck noted that Arc, as the first of its kind, is likely to be more expensive than subsequent power plants. This observation reflects the inherent costs associated with pioneering new technologies and establishing proof of concept.
Mumgaard told TechCrunch that Sparc will not only demonstrate the scientific validity of fusion but also provide valuable insights into the capabilities required to deliver commercially viable fusion power. He further explained that Sparc will provide critical cost data. “That’s very important. But it’s also to know the capabilities that you need to be able to deliver it. It’s also to have the receipts, know what these things cost.”
While the new funding will support the progress of Sparc, it will not be sufficient to finance the construction of Arc, which Mumgaard estimates will cost several billion dollars. At this juncture, the company has not yet determined the precise structure of the financing for Arc.
Mumgaard stated, “The fact that it’s a first of a kind technology is a wrinkle that then has a big impact on where the capital will come from.” Mumgaard concluded, “We’re not entirely sure, but we are pretty committed to doing this. And our investors are pretty committed to doing this.” These declarations demonstrate the unwavering commitment of CFS and its investors to realizing the potential of fusion energy as a clean and sustainable power source.
