Funding for fusion energy-focused startups has fallen sharply in recent quarters after reaching high levels two and a half years ago.
So far this 12 months, just $58 million has gone to firms innovating on the way forward for fusion as a potential energy source, based on Crunch Base data. For comparison, greater than $2.4 billion was sent into space in the fourth quarter of 2021, the peak funding period.
To get a sense of how funding for merger startups has modified, we used Crunchbase data to interrupt down investments in this space over the last 14 quarters.
As you may see, there was something of a fusion gold rush at the end of 2021. It was then that a series of gigantic financial transactions were accomplished.
By far the largest was a Series B round value greater than $1.8 billion for the Cambridge, Massachusetts-based company Commonwealth Fusion Systemsconducted by Global Tiger.
Everett based in Washington Helion Energy second place with a PLN 500 million Series E win Sam Altman — with the potential for an additional $1.7 billion depending on key results.
The generous funding has coincided with greater optimism about the feasibility of nuclear fusion – the energy created by combining two atoms – as a zero-emissions energy source. Plus, investors back then were used to writing large checks. Global investment in startups hit a record high in the fourth quarter of 2021 and has declined significantly since then.
Dramatic ups and downs
Merger financing has seen much more dramatic annual ups and downs than the average for startup sectors, as shown in the chart below.
Part of this is likely a function of the undeniable fact that relatively few runs end in a given quarter, and they are often large.
In addition to Commonwealth Fusion and Helion, several other fusion firms have raised funds colossally over the years. Janesville, Wisconsin-based Gloss technologies raised over $500 million in equity financing while headquartered in British Columbia General mergerhas raised over $350 million in financing up to now.
Slow down or just a pause?
Given the small variety of fusion rounds and the history of huge financings, it is unclear whether the recent investment delay is merely a temporary pause between large rounds or a sign of other investor concerns.
The funding pullout can also be less about the technology’s potential than about investors’ recent appetite for dangerous, expensive and high-impact investments that do not focus on AI.
Whatever the reason, the numbers speak for themselves: fusion funding has declined, and it should take a multiple increase to get back to where it was a few years ago.