Zap Energy investors in the latest $130 million round include Soros Fund and Emerson Collective Laurene Powell Jobs

The race for commercial fusion energy is gaining momentum.

Investors have been investing in fusion startups over the past few years, and one of the latest beneficiaries of their philanthropy is Zap Energy, a startup based in Everett, Washington that’s cleverly harnessing star power. According to SEC filings, the company recently completed a deal worth $130 million, bringing the total amount to $327 million, according to PitchBook. Only four merger startups have raised more.

The new round was led by Soros Fund Management with participation from new investors BAM Elevate, Emerson Collective, Mizuho Financial Group and Xplor Ventures. Existing investors also recovered, including Breakthrough Energy Ventures, Chevron Technology Ventures, Energy Impact Partners, Lowercarbon Capital and Shell Ventures. Additional investors may be named later.

The clever joke about fusion power is that it’s always “a decade away,” and it probably still is. However, investors have become optimistic as recent developments, including 2022 groundbreaking at the National Ignition Facility, suggest that commercial-scale demonstrations could eventually be realized within a decade or less.

Their motivation is clear: a chance to take a bite out of the multitrillion-dollar global energy market while decarbonizing a huge swath of the economy.

Although different companies adopt different methods for producing and controlling fusion reactions, they all share the same basic principle: they use safe, widely available fuel sources and fuse their nuclei, using the resulting power to produce electricity or heat (or both).

Zap’s approach can best be described as “lightning in a bottle.” This technique, known as shear flow-stabilized Z compression, sends an electric current through the plasma. This interaction generates a magnetic field that compresses the plasma, eliminating the need for expensive magnets or lasers that other companies and researchers have used to create the conditions necessary for nuclear fusion.

When deuterium and tritium isotopes of hydrogen in the plasma ignite, they release neutrons and heat. This energy is absorbed by the molten metal surrounding the reaction chamber, which can then be used to generate electricity. Zap repeats this process over and over, much like a cylinder firing in an internal combustion engine.

Together, the reactor and molten metal jacket are just 3 meters in diameter and will generate 50 megawatts of commercial-scale electricity, enough to power about 50,000 to 60,000 homes. For larger loads, the company says several reactors can be placed together.

The new $130 million round is slightly less than the $160 million Series C round that the company raised in 2022. Several existing investors participated, although there were two notable exceptions: DCVC and Valor Equity Partners.

Although the cartridge is smaller, it will likely help the company test key parts of the reactor. Like many climate technology companies that specialize in hardware, Zap finds itself in the middle of what some call the “commercial valley of death.” There, startups that have proven that the science and engineering behind their technology are sound still need to spend significant sums to bring it to commercial scale.

Recently, climate tech investors have been wondering how to navigate uncertain terrain as their most promising portfolio companies enter the valley. Some propose corporate venture capital as an option, while others point to growth equity or project finance as a solution. The addition of Soros Fund management and continued support from Chevron Technology Ventures, Breakthrough Energy Ventures and others suggest Zap continues to find support from many investors.