Type One Energy raises $87 million for fusion power technology

Fusion power startup Type One Energy has secured $87 million in a convertible note, according to sources familiar with the deal. A convertible note is a type of debt financing that converts to equity. This latest funding brings the company’s total venture investment to more than $160 million. According to sources and later confirmed by the company, Type One is also in the midst of raising a $250 million Series B round at a $900 million pre-money valuation.

The startup’s funding trajectory includes:

• 2023 Seed Round: $29 million
• 2024 Seed Round Extension: Brought the total seed funding to $82.5 million, with investors including Bill Gates’ Breakthrough Energy Ventures, Doral Energy-Tech Ventures, and TDK Ventures
• Current Convertible Note: $87 million
• Target Series B: $250 million at a $900 million pre-money valuation

Type One is raising capital as electricity demand rises, driven by the expansion of data centers and broader economic electrification. Data centers are expected to use nearly three times more electricity by 2035, while overall electricity demand is forecast to grow by 4% annually through next year. Fusion power, which generates energy by fusing atoms rather than splitting them, offers a potential source of clean, high-capacity power without the radioactive waste associated with traditional nuclear fission.

To deploy its technology, Type One has partnered with the Tennessee Valley Authority (TVA), a US government-owned corporation that provides electricity. The partners plan to build a commercial power plant called Infinity Two at the site of the former Bull Run Fossil Plant, a coal-fired facility retired in 2023. Infinity Two is expected to generate 350 megawatts of electricity and could come online in the mid-2030s.

The facility will utilize a stellarator, which is a specific type of magnetic confinement fusion reactor that uses twisted, doughnut-shaped magnets to control superheated plasma. Unlike fission reactors, fusion systems do not produce significant radioactive waste. They also don’t pose a risk of catastrophic meltdowns. Rather than building and operating the plants itself to sell electricity, Type One plans to sell its technology to the TVA and other power providers, who will build, own, and operate the facilities.

Why it matters

Type One Energy’s funding and partnership with the TVA to build a fusion power plant at a former coal site highlights the growing demand for clean energy solutions driven by data center expansion.