Geothermal startup Fervo Energy announced its intention to raise up to $1.3 billion in its initial public offering (IPO). The company would be valued at up to $6.5 billion if shares sell at the top of its price target between $21 and $24. This valuation is more than double what Fervo sought earlier this year when it confidentially filed paperwork with the SEC to initiate the IPO process.
The stock will trade on Nasdaq under the ticker symbol FRVO. Fervo’s price target follows the successful IPO of X-energy, a nuclear power startup that raised $1 billion in an upsized offering. When setting its price target, X-energy initially sought a valuation of around $7 billion, with its market capitalization now exceeding $8 billion.
Fervo and X-energy’s valuations have been boosted by growing electricity demand from tech companies racing to secure supplies for AI data centers. This demand surge has driven the prices for new natural gas power plants up by 66% over the past two years.
Fervo stated its Cape Station power plant, its first large-scale project, will generate electricity at a cost of $7,000 per kilowatt of installed capacity. The company aims to reduce that cost to $3,000 per kilowatt, making it competitive with natural gas.
