General Fusion, a Canadian fusion energy startup, announced today that it had been thrown out its lifeline in the form of a fresh $22 million funding.
The company fired at least 25% of its employees in May and placed a bid to strengthen its stretched finances. At the same time, CEO Greg Twinney wrote an open letter pleading for funds. Additional cash gives a breathing chamber to a general fusion, but not much.
A subset of General Fusion’s existing investors ultimately ponied up for what The Globe and Mail reports was a “pay to play” round — a financing structure where existing investors must participate to maintain their ownership stakes — that included Chrysalix Venture Capital, Gaingels, Hatch, MILFAM, JIMCO, PenderFund, Presight Capital, Segra Capital Management, and Thistledown Capital. PenderFund and Segra have won a board of directors as part of the transaction.
The company described the round as “oversubscribed” but $22 million is well below the $125 million reportedly the company is seeking. Adam Rodman, chief investment officer at Segura Capital, told Globe and Mail that $22 million was “the smallest possible capital” to help the company reach its next scientific milestone.
According to Pitchbook, the general fusion was founded in 2002, before the round raised $440 million.
Just a few months before revealing the financial issues, the popular Fusion activated its latest device, the Lawson Machine 26 (LM26), a half-scale prototype of a commercial-scale nuclear reactor. New funding could increase the time to run the LM26 as it attempts to collide with major scientific milestones.
Common fusion pursues what is known as “magnetized target fusion.” Inside the reactor, electricity passes through deuterium-tritium fuel (heavy hydrogen isotopes) and generates a magnetic field that encloses the plasma. That plasma is compressed by a liquid lithium wall that is forced inward by a steam-driven piston. This combination must drive temperature and pressure in the plasma high enough to induce a fusion reaction.
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When commissioned the LM26 in March, the general Fusion said it hopes the device will reach scientific break-even in 2026. “Scientific break-even” is a technical term in the fusion world, meaning the amount of energy produced by a fusion reaction. Reaching a scientific break-even point is extremely important in demonstrating the viability of nuclear reactor designs, but does not guarantee commercial success.
Today, the general said he did not provide a timeline but pursued a scientific break-even point. The company has also listed two intermediary targets: heating plasmas up to 10 million degrees Celsius and 100 million degrees Celsius.
Given the limited size of fresh funds, a general fusion could shoot the most achievable milestones and convince investors to cut back on new rounds of checks. The company may have bought a few precious months, but unless it can provide promising results, it could potentially return to the same tight spot in May.
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