We are thrilled to announce our lead investment in fusion energy startup Proxima Fusion’s oversubscribed $20M seed funding round. Proxima Fusion is building the first generation of fusion power plants based on quasi-isodynamic (QI) stellarators with high-temperature superconductors. Their unique approach represents a complete game-changer in the energy sector, and we couldn’t be more excited to join Proxima in their mission to bring Europe into a new era of clean energy.
The Max Planck Foundation, German government-backed DeepTech & Climate Fonds, and Bayern Kapital joined the round, alongside existing investors, including Plural, UVC Partners, High-Tech Gründerfonds, Wilbe, and Visionaries Club.
Why fusion? And why now?
The global need for clean, abundant, and secure energy has become increasingly urgent as demand for electricity and hydrogen rises. The looming climate and energy crises, underscored by recent geopolitical, economic, and environmental challenges, have emphasized the critical need for moonshot solutions to offer hope for achieving climate goals and transforming our energy future.
Renewable energy alternatives have been unable to solve issues surrounding intermittency and higher output, while public acceptance of nuclear fission energy remains limited.
Enter nuclear fusion, the oldest energy form we know and the energy process that has been fueling our sun for approximately 4.5 billion years. The concept of man-made fusion energy, however, was only truly introduced within the past century. First experimentally demonstrated in the late 1930s by Australian physicist Mark Oliphant, since then nuclear fusion has undergone several iterations and approaches, with stellarators and tokamaks emerging as the two frontrunners in the 1950s.
Fast forward to the 2000s, where an investment of €1.3BN facilitated the creation of the world’s largest stellarator - the Wendelstein 7-X stellarator - at the Max Planck Institute of Physics, with years of research culminating in a stellarator optimization breakthrough in 2022.
Introducing Proxima Fusion
The first and only spin-out company from the Max Planck Institute of Physics, Proxima Fusion was founded in 2023 by Francesco Sciortino, Lucio Milanese, Jorrit Lion, Jonathan Schilling, and Martin Kubie. With a team made up of experts from the Max Planck Society, MIT, and Google, Proxima Fusion is uniquely positioned to take the massive step of making fusion energy a reality.
Speaking on our investment, Harald Nieder, physicist and redalpine General Partner, stated: “Fusion energy presents both incredible challenges and unprecedented opportunities, and it must be pursued to ensure a clean energy future. I’m incredibly excited to partner with Proxima Fusion’s game-changing team, setting a new standard for European deeptech moonshots.”
Why we invested
We’ve been watching Proxima Fusion is an excellent example of redalpine’s investment approach straddling science and software: companies operating at the intersection of multiple enabling technologies to bring highly differentiated science, research, and technology seamlessly to end users. The following factors drove our decision to invest:
Convergence of Technologies: We believe that we are currently at a pivotal moment where various advanced technologies—such as artificial intelligence, enhanced computational power for simulations, and additive manufacturing—are converging to make nuclear fusion a feasible and operational reality. This belief underpins the view that fusion energy, as the ultimate game-changer in the energy sector, is now within reach thanks to these technological advancements.
Stellarator Approach Advantage: Proxima Fusion’s choice of the stellarator approach over the more traditional tokamak model is a key factor in the investment decision. The stellarator, while complex in design due to its intricate magnet configurations, promises a more stable and manageable operational phase. This approach is deemed more promising and compatible with current technological capabilities, particularly in design and simulation, making it a more tractable solution for achieving operational nuclear fusion reactors.
Strategic Location: Proxima Fusion’s strategic location in Munich and its collaborations with leading institutions like the Max Planck Institute provide a significant competitive advantage. Germany is at the forefront of stellarator technology research, and Proxima’s proximity to and collaboration with top research bodies ensure access to cutting-edge insights and developments in the field.
Team: With every investment, the team is a key consideration. The Proxima team covers the necessary breadth of expertise, from plasma physics, computational design, superconductivity to stellarator engineering, with world leading talent. The team follows an engineering first approach guided by a strong focus on the practical challenges of grid deployment of Proxima’s technology. The strong conviction in Proxima’s team, combined with their approach and strategic partnerships, led to a proactive investment, highlighting the confidence in the team’s ability to lead in the advancement of nuclear fusion technology.
The market
The need for a new and clean energy source has become a pressing global priority, and the benefits of fusion energy are clear: it produces no CO2, eliminates the risk of runaway reactions, and offers a potentially endless supply of fuel.
The market potential for this energy source is huge, estimated to be worth trillions of dollars. This has led to many startups exploring fusion power, with Proxima Fusion leading in magnetic confinement using optimized stellarators that are current-free. This approach builds on years of research and is ready for commercialization, promising to address the energy demands of a decarbonized grid by 2050.
The necessity for fusion energy is underscored by its potential to deliver steady, on-demand electricity, a stark contrast to the intermittency of conventional renewables. Beyond electricity, fusion power plants could revolutionize energy-intensive processes like desalination and carbon capture, both identified as critical to addressing global challenges of water scarcity and climate change, respectively. The energy requirements for these processes alone illustrate the immense demand for the uninterrupted energy supply that fusion could provide.
Fusion energy reduces dependency on external energy sources and revives an industrial sector hampered by energy constraints and costs. Whilst Europe is not alone in its pursuit of fusion energy, competing against both the USA and China, its technological and scientific strengths, accompanied by keen investment in this sector, have made the region a compelling contender within the new energy ‘space race’.
A brighter future
We look forward to empowering this game changer by leveraging our extensive network within the tech and energy sectors to facilitate partnerships, collaborations, and customer introductions, and accelerate Proxima Fusion’s technological development and market penetration. Moreover, we will support the company in navigating regulations and securing public funds, including government and EU grants dedicated to green and innovative energy solutions.
We couldn’t be more excited to invest in Proxima Fusion, a company we truly believe will revolutionize the global energy landscape and drive forward the transition to sustainable and clean energy for generations to come.