Fusion technology €411 Million for Reactor Turns Proxima Fusion into a Unicorn

A funding round has secured the next steps on the path towards a German fusion reactor—aided by the Free State of Bavaria nearly doubling the sum. The start-up's valuation has soared.

The start-up Proxima Fusion has raised hundreds of millions of euros for the construction of a fusion reactor. A recent funding round, which included participation from RWE and Google, generated €411 million, according to the company. This means Proxima Fusion has met the conditions for the Free State of Bavaria to provide a further €400 million, as agreed in February.

The start-up aims to build a commercial fusion reactor in Gundremmingen, Swabia, by the late 2030s, which will actually feed electricity into the grid. To achieve this, the "Alpha" demonstration reactor is to be built in Garching near Munich by the early 2030s. This project alone is estimated to cost two billion euros. To raise these funds, the company is also looking towards the federal government; a spokesperson expressed hope that a tender for corresponding funding will be launched in the autumn.

Components for Alpha are already being manufactured, with the first magnet scheduled for completion at the end of next year. The newly acquired funds will also be directed towards construction, the expansion of development and manufacturing capacities, and the further advancement of core technologies.

Complex magnetic coils

After fusion research was long the domain of states and international organisations, an increasing number of start-ups are now attempting to build fusion reactors using various approaches. In addition to the classic concept of confining hot plasma with magnetic fields, other methods include using lasers for ignition.

Proxima Fusion relies on magnetic fields, but in a specific form: the reactor is intended to be a so-called stellarator. Unlike the more common tokamak, which is shaped like a doughnut, a stellarator uses complex magnetic coils to cause the confined plasma to twist. This facilitates continuous operation but is more difficult to design and build.

The start-up is banking on new manufacturing techniques and materials to make this construction possible. Germany is said to possess high levels of expertise in this field, with experience already gained through the Wendelstein programme at the Max Planck Institute for Plasma Physics—the very institute from which Proxima Fusion emerged as a spin-out.

Now a Unicorn

Following this funding round, Proxima Fusion states it is now valued at more than €2.4 billion. This secures the company a place among the "unicorns"—start-ups that achieve a valuation of over one billion.

"This financing demonstrates that Germany and Europe are capable of mobilising international capital for strategic future technologies," said Francesco Sciortino, co-founder and CEO of Proxima Fusion. "The international investor community has sent a strong signal: they trust not only in Europe's scientific excellence but also in our ability to build globally competitive industrial companies from it."

He added that fusion technology has the potential "to attain a similar economic significance as the automotive industry once did" and could become a new key industry in Germany.

International competition

Given the competition—billions have already flowed into fusion start-ups in the USA and China—it is far from certain that Proxima Fusion will succeed. Furthermore, scientists have been pursuing fusion for decades; some now consider it a dead end, while others still see it as a great hope. Regarding stellarator technology, the Munich-based company currently sees itself in a leading position.

Fusion energy is based on the process of merging ("fusing") atomic nuclei. In the sun and other stars, this process provides the radiated energy. Fusion energy is considered cleaner than nuclear fission and, unlike fossil-fuel power plants, involves no direct CO2 emissions.