Bill Gates-backed Type One Energy raises $87M ahead of $250M Series B

Type One Energy, a startup focused on fusion power, has successfully secured $87 million in new funding, according to sources familiar with the transaction. This latest financial infusion, structured as a convertible note, elevates the company’s total venture funding to over $160 million. Currently, Type One is in the process of negotiating a $250 million Series B round, aiming for a pre-money valuation of $900 million. The company, like many in the energy sector, is experiencing heightened interest due to the increasing power demands of data centers and the ongoing electrification of the economy. Projections indicate that electricity consumption by data centers could triple by 2035, with overall electricity demand anticipated to rise by 4% annually until next year. Fusion power offers the potential for vast amounts of clean energy, utilizing the process of fusing atoms, which generates considerable heat and energy. This heat is then harnessed to turn turbines, functioning similarly to traditional fossil fuel plants but without the associated pollution. Unlike fission, fusion does not produce significant radioactive waste and minimizes the risk of catastrophic failures. There are two primary methods for achieving fusion: magnetic confinement and inertial confinement. Type One Energy is opting for magnetic confinement, utilizing a stellarator design where magnets are arranged in a unique doughnut shape that adapts to the plasma's requirements. Previous stellarators have demonstrated prolonged plasma control, although none have yet been designed for energy production. In a significant move last year, Type One entered into agreements with the Tennessee Valley Authority to establish its first commercial power plant on the site of the now-retired Bull Run Fossil Plant. Named Infinity Two, this facility is projected to produce 350 megawatts of electricity and is expected to commence operations in the mid-2030s. Distinctively, Type One Energy does not plan to construct the power plants or reactors itself. Instead, it will provide essential technology to the TVA and other power providers, who will then build, own, and operate the facilities. Earlier, in 2023, Type One raised a $29 million seed round, which was later extended to $82.5 million in 2024, with prominent investors including Bill Gates's Breakthrough Energy Ventures, Doral Energy Tech Ventures, and TDK Ventures.