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Nuclear Fusion Technology and Venture Capital

If brought to fruition, nuclear fusion will be humanity’s cleanest and safest energy source yet. Here’s what to know about this exciting new technology.


At 92.6 million miles (150 million kilometers) away, the Sun appears small enough to an observer on Earth’s surface that it can be blotted out by a 50-cent coin held at arm’s length from the human eye.

But the true size and importance of our solar system’s star is quite the opposite of how it appears at first glance. At about 865,000 miles (1,392,000 kilometers) in diameter, the Sun is 109 times the diameter, 330,000 times the mass, and more than 1.3 million times the volume of our home planet. In fact, the Sun makes up 99.86% of our solar system’s mass!

The Sun is also extremely hot. While the surface temperature of the hottest planet in our solar system, Venus, reaches about 867 degrees Fahrenheit (464 degrees Celsius), the surface of the Sun measures 9,941 degrees Fahrenheit (5,505 degrees Celsius). That’s hot enough to boil all but four naturally-occurring chemical elements in the universe.

Below the surface, temperatures get even more extreme. In the convection zone of the Sun, temperatures reach about 3.6 million degrees Fahrenheit (2 million degrees Celsius), while the layer below the convection zone, the radiation zone, measures about 14.4 million degrees Fahrenheit (8 million degrees Celsius).

Nuclear Fusion in the Sun's Core

At the heart of the solar interior lies the core, a ball of plasma 10 times denser than gold. Here, temperatures reach a sweltering 27 million degrees Fahrenheit (15 million degrees Celsius), hot enough to enable nuclear fusion to occur.

This chemical reaction is how the Sun generates energy. Inside the core, hydrogen nuclei fuse together into helium nuclei in a five-step process known as the proton-proton cycle, releasing large amounts of energy in the process. The overall proton-proton cycle releases about 26 megaelectronvolts (MeV) of energy.

Interestingly, neither the fusion of two protons into deuterium (the first reaction in the five-reaction proton-proton chain) nor the fusion of deuterium and one proton into helium-3 (the second of the five reactions) releases much energy. The first reaction releases just 1.44 MeV of energy, while the second releases 5.49 MeV of energy. Together, these two reactions account for just 25.9% of the energy released in the overall proton-proton chain.

Rather, it is the synthesis of one alpha particle from two helium-3 nuclei that yields the most energy. This reaction produces 12.86 MeV of energy, or about 48.1% of the overall reaction’s total.

Therefore, it is technically the fusion of lighter isotopes of helium into its heavier isotopes, and not the oft-mentioned fusion of hydrogen into helium, that is responsible for most of this fusion reaction’s energy output.

Bottom line: one kilogram of hydrogen plasma that undergoes full fusion into helium-4 can produce 170 gigawatt-hours (GWh) of energy, or enough to power around 16,000 single-family homes in the United States for an entire year.

Replicating the Proton-Proton Cycle on Earth

Fusion’s potential to provide virtually limitless clean energy to power civilization’s energy needs makes it a topic of intense interest among nuclear scientists.

If successfully brought to fruition, fusion energy will produce approximately four times more energy per kilogram of fuel than nuclear fission, the only type of nuclear power currently available on Earth.

Why Fusion is Better than Fission

But greater energy-generating capacity is just one of nuclear fusion’s many benefits. For starters, fusion reactions are also clean, safe, and generate no nuclear waste.

In contrast, nuclear fission reactions rely on the splitting (hence “fission”) of radioactive nuclei, a process which creates dangerous waste material in the form of spent nuclear waste. In worst-case scenarios, nuclear meltdowns can occur, causing radioactive materials to contaminate the environment. This can lead to radiation sickness or even render areas uninhabitable for hundreds or thousands of years.

Luckily, fusion reactors pose no meltdown risk. This is because fusion does not rely on runaway (i.e., explosive) chain reactions to occur. Additionally, the initial conditions required for fusion reactions to take place are so extreme that reactions would cease to occur if the reactor’s core were breached. For this reason, the International Atomic Energy Agency lauds nuclear fusion as “inherently safe”.

Nuclear Fusion Technology: Stellarators and Tokamaks

However, creating the necessary conditions for fusion reactions to occur on Earth is a challenge in itself.

Because the extraordinary pressure reached at the Sun’s core, 340 billion times the atmospheric pressure at sea level, is impossible to replicate on our planet, temperatures must exceed a minimum of 180 million degrees Fahrenheit for fusion reactions to take place on Earth. That’s about six times as hot as the Sun’s core.

In order to create these temperatures, fusion reactions must be contained within tailor-made reactor devices. One of the earliest theoretical designs was the stellarator, a ring-shaped device that uses electromagnets to generate electric fields that confine the plasma fuel used in fusion reactions.

Though early stellarator designs were dismissed as too unstable and unsafe for operation, later improvements generated renewed interest in the design. Today, large-scale stellarator prototypes like the Wendelstein 7-X at Germany’s Max Planck Institute for Plasma Physics and the Large Helical Device (LHD) at Japan’s National Institute for Fusion Science offer fusion scientists the opportunity to conduct their research in live environments.

Other competing designs, like the tokamak reactor, have also attracted interest among the fusion community. First conceived by Soviet researchers, the tokamak (which is an acronym for “toroidal chamber with magnetic coils” in Russian) is a donut-shaped, graphite-plated device used to house plasma fuel.

Situated in the middle of each tokamak is a central solenoid, which induces a current within the plasma and aids in the heating process. Wrapped around the body are toroidal field coils that position and confine the plasma. Together, these components create the conditions necessary for fusion reactions to occur within the toroidal chamber.

Today, experimental tokamaks are being developed by international coalitions. The world’s largest and most advanced tokamak is the International Thermonuclear Experimental Reactor (ITER), a 23,000-ton, 840 cubic meter behemoth that aims to generate fusion energy by 2025. When it does, it will have an output capacity of 500 megawatts of power, enough to power thousands of homes in perpetuity at continuous operation.

Private Capital Embraces Fusion

International agency-sponsored and government-backed projects are no longer the only sources of funding for fusion. Private investors, including venture capital firms, have taken an interest in fusion technology, and a promising number of startups have emerged as leading contenders in the race to make commercially-available fusion power a reality.

Commonwealth Fusion

One of the best-funded fusion startups in the world today, Commonwealth Fusion has raised more than $2 billion in funding since its inception in 2018. Most recently, the company raised a $1.8 billion Series B in November 2021 from investors like Tiger Global, Bill Gates, Google, Coatue, Emerson Collective, and others, which it will use to develop SPARC, a tokamak reactor with a plasma volume of 20 cubic meters.

Developed in conjunction with MIT’s Plasma Fusion and Science Center (PFSC), Commonwealth hopes the project will produce energy by 2025. When operational, the company’s tokamak will generate 140 megawatts of power. 

TAE Technologies

Founded in 1998, TAE Technologies (formerly known as Tri Alpha Energy) has attracted more than $1.2 billion in funding since inception. In July 2022, the company raised a $250 million Series G-2 financing round from investors like Chevron, Sumitomo Corporation, and Google to develop its sixth-generation reactor.

Unlike other startups, TAE’s reactors do not follow design principles from the tokamak or the stellarator. Instead, the company develops field-reversed configuration (FRC) devices which aim to fuse hydrogen-boron fuel (rather than just hydrogen isotopes). The company’s current design, the fifth-generation Norman reactor, can theoretically produce up to 750 megawatts of power. TAE expects to deliver usable electricity to the grid by 2030.

General Fusion

Founded in 2002 by Canadian physicist Michel Laberge, General Fusion is a Vancouver, British Columbia-headquartered startup that works to develop “fusion power using existing technologies”. Its Magnetized Target Fusion (MTF) reactor uses a spherical tokamak design, which subjects the plasma fuel to higher magnetic pressures, thus leading to higher power-generating capacity than traditional tokamaks.

In November 2021, General Fusion raised a $130 million Series E from Temasek, a Singapore-based investment company with S$403 billion (US $283 billion) in AUM. The fusion startup expects to commence construction on its MTF reactor by the end of the year. Backed by (and built on) the United Kingdom’s Atomic Energy Authority campus near Oxford, the reactor is expected to go online by 2025.

Investing in the Future of Energy

At The Spaventa Group, we’re excited about the rapid progress in the fusion space, and we’re eager to back bleeding-edge startups at the forefront of this next energy revolution.

To identify the best startups in this space, our analysts and subject-matter experts use a rigorous due diligence process to vet hundreds of companies per year, seeking to uncover the startups that are working on the most promising developments. We place a prime selection of these companies into our in-house alternative funds, and we invite you to invest with us.

Get in touch with us today to see how funding the fusion-powered future can help you earn market-beating returns.