Canadian fusion startup General Fusion raises $22 million

Xconomy first broke the news on 24 July 2009 that General Fusion, a Burnaby, British Columbia-based fusion startup, had raised $9 million out of a $12.5 million equity offering. Then, the investors were undisclosed but include a syndicate from the US, UK, and Canada. The company’s board of directors includes members of GrowthWorks Capital and Chrysalix Energy in Vancouver, BC, Braemar Energy Ventures in New York, and Entrepreneurs Fund in London.

However, on 4 Aug 2009, Reuters reported that General Fusion had quietly raised $22 million in early stage funding from venture capitalists. GrowthWorks Capital, Braemar Energy Ventures, Chrysalix Energy Ventures and The Entrepreneurs Fund combined to provide $9 million for General Fusion. The Sustainable Development Canadian Technology Fund, a government entity charged with financing environmentally friendly technology projects, additionally kicked in more than $13 million, contingent on General Fusion’s ability to meet key milestones.

General Fusion is developing a novel method of energy production called magnetized target fusion in which ionized gas is trapped by a magnetic field and compressed in a way that is safe, clean and cost-effective. The company is currently working on a four-year, $50 million demonstration project (2013). The project is being run in parallel with 2 other massive fusion projects: the $6 billion National Ignition Facility at Lawrence Livermore National Laboratory in the US and the $20 billion ITER project in Provence, southern France. You can read this very interesting Forbes article in Oct 2008 about the race for fusion energy pits a giant reactor in France against 2 upstarts in North America. The other startup is Tri Alpha Energy which is backed by Paul Allen’s Vulcan, Venrock, Enel Produzione SpA, Goldman Sachs and PIZ Signal.

The CEO, Doug Richardson, said that “What we’re trying to do is apply modern technology to an old idea.” The technology was abandoned more than 30 years ago because precision controls, computer processing power and plasma technology were not able to sustain its design. “What we’re doing is taking that technology and speeding it up by about a thousand-fold,” said Richardson. General Fusion claims their fusion reactor will be far cheaper and simpler than those giant and expensive reactors such as the one in France. You can read about General Fusion’s technology on their website or check out this Popular Science article which describes the technology more in length and with pictures as well or the Technology Review article.

If General Fusion can meet its first milestones, it may have access to larger rounds of capital. One investor, the Entrepreneurs Fund, is backed by the Brenninkmeijer family, a wealthy family office in Europe. The Brenninkmeijer family also funds Good Energies, an investor in cleantech projects and an early backer in such solar companies as Q-Cells. On its website, it states “General Fusion is a seven year old pre-IPO technology company. It has just completed phase one and is now starting its second round of financing in order to begin work for phase two.” The company which was founded by Doug Richardson and Michel Laberge in 2002 received its seed financing of C$1.2 million in Sep 2007 from Chrysalix Energy. So probably this news is the 2nd round of financing?