Geothermal startup Fervo Energy to raise up to $1.3B in IPO

Fervo Energy, an emerging player in the geothermal sector, announced on Monday its ambitions to raise up to $1.3 billion through an initial public offering (IPO). If shares reach the upper end of its price target, set between $21 and $24, the company's valuation could soar to approximately $6.5 billion. This potential valuation marks a significant increase from earlier this year when Fervo was reportedly aiming for a lower amount during its confidential filing with the SEC to initiate the IPO process. The stock is expected to be listed on Nasdaq under the ticker symbol FRVO. The momentum for Fervo’s IPO follows the successful debut of X-energy, a nuclear power startup that raised $1 billion in an expanded IPO, targeting a valuation around $7 billion. Currently, X-energy boasts a market capitalization exceeding $8 billion. Both companies are benefitting from a surge in electricity demand driven by technology firms eager to secure energy supplies for their AI data centers. This increased competition has led to a staggering 66% rise in the costs associated with new natural gas power plants over the past two years. Fervo's Cape Station, its inaugural large-scale project, is projected to generate electricity at a cost of $7,000 per kilowatt of installed capacity. The company aims to further reduce this cost to $3,000 per kilowatt, at which point it would become competitive with natural gas options.