Fusion Startup Xcimer Lands $100M, Boosting Sector’s Lackluster Funding

Just four days ago, we published a story about how fusion funding had fizzled out in recent quarters, particularly for mega-sized rounds.

At the time, I noted that a single big round or two could quickly cause this narrative to change. But I hadn’t anticipated it would happen so quickly.

Turns out, it did. This morning, Denver-based Xcimer Energy announced it raised $100 million in a Series A financing led by Hedosophia and joined by Breakthrough Energy Ventures, Lowercarbon Capital, Prelude Ventures, Emerson Collective, Gigascale Capital and Starlight Ventures. The company is working on what it describes as a  transformative technology for laser-driven inertial fusion.

Xcimer says it will use the funding to build a prototype laser system including the “world’s largest nonlinear optical pulse compression system.” Founded in 2022, Xcimer received $9 million in grant funding from the U.S. Department of Energy’s Milestone-Based Fusion Development Program, which is working to put fusion energy on the power grid.

Tally totals rise

As a result of Xcimer’s funding announcement, fusion investment tallies are looking up. The financing took total funding to fusion-focused startups to the highest quarterly level since Q2 2023.

Still, it doesn’t entirely change the trajectory of fusion investment. Overall, funding to startups focused on fusion energy has declined sharply in recent quarters after hitting a high 2 1/2 years ago.

Including Xcimer, roughly $158 million has gone to companies innovating around the future of fusion as a potential power source so far this year, per Crunchbase data. By contrast, more than $2.4 billion went to the space in the fourth quarter of 2021, the peak period for funding.

Looking back, there was something resembling a fusion gold rush in late 2021. That’s when a series of giant financings got done.

By far the biggest was a Series B of over $1.8 billion for Cambridge, Massachusetts-based Commonwealth Fusion Systems, led by Tiger Global.

Everett, Washington-based Helion Energy came in second with a $500 million Series E led by Sam Altman — with an opportunity for an additional $1.7 billion tied to performance milestones.

Besides Commonwealth Fusion and Helion, a few other fusion companies have been prodigious fundraisers over the years. Janesville, Wisconsin-based Shine Technologies picked up over $500 million in equity financing, while British Columbia-based General Fusion, has taken in over $350 million in funding to date.

For the most part, generous financings coincided with a period in which investors were used to writing big checks in a multitude of startup sectors. Global startup investment hit a record high in Q4 2021 and has fallen considerably since.

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Illustration: Dom Guzman