It sounds almost unbelievable that a small, startup company is experimenting with fusion, the science behind the hydrogen bomb.
It’s also a science that governments spend billions of dollars each year to study and that has seen several major scientific scandals in the last two decades.
But Burnaby, British Columbia-based startup
Indeed, both venture capitalists and the Canadian government believe enough in the company to commit more than $22 million in early stage funding to see it work.
“What General Fusion is working on is game changing,” says investor Rolf Dekleer, vice president of investments for Canadian VC fund
It’s easy to understand the market potential. But the technology is way more complicated.
General Fusion has developed a technology that was abandoned more than 30 years ago because precision controls, computer processing power and plasma technology were not far enough along to sustain its design.
“The only thing that we’re doing is taking that technology and speeding it up by about a thousand fold,” says General Fusion CEO Douglas Richardson.
The company is working on two major types of fusion projects: magnetic fusion, which uses large magnets to force particles together to fuse, and inertial confinement fusion, which uses lasers to shoot high-density fuel pellets. The company hopes that it can dramatically cut costs by combining aspects of the two major fusion projects.
The aim is to achieve a net gain, says Richardson, in which the fusion produces more power than it consumes.
Net gain is the Holy Grail, says Dekleer. If General Fusion can get to that point with its prototype, Dekleer is confident that strategic buyers will take notice.
“When they get to the point where they can produce net gain, than a company like
Sounds promising, but when Richardson first started shopping his company around Silicon Valley to raise money he ran into a lot of closed doors.
“The investors in Silicon Valley have made a pile of money in software and everyone wants to get behind the next
But the problem of precedent wasn’t the only obstacle. Even the most out-there Silicon Valley VCs, the ones that seem to attract crazy new technology ventures, wouldn’t do the deal. The problem was that they’d been burned on other capital-intensive cleantech projects that hadn’t panned out, Richardson says.
Many VCs felt they’d be tossing their money into something that would never come to fruition, says Richardson.
“Fusion is 30 years away and it’s been that way for 50 years,” he says. “It lost a lot of credibility, and there are some really hard skeptics and getting past the skepticism is hard.”
It was hard for Dekleer to get past his initial skepticism, too. The first thing he did was check the background of Richardson and co-founder Michel Laberge. The two had worked together at
Then the investors brought in some high-powered experts, from
If General Fusion can meet its 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
Working with nuclear reactions isn’t easy. Even for companies with impressive financing and advisors.
Consider the fate of Archimedes Technology Group. It had an impressive group of investors and directors, including Arthur Rock, backer of
The San Diego-based startup’s technology was impressive, too. Founded on the work of master researcher Tihiro Ohkawa, Archimedes used plasma physics to separate the elements of nuclear waste. It had to bring in a special contractor to build a warehouse of non-ferrous materials because the magnetic fields it generated were so large.
In fact, some of the consultants who worked on the General Fusion feasibility studies had cut their teeth studying Archimedes years before.
But Archimedes couldn’t get the necessary government contracts to remove and treat nuclear waste. Archimedes eventually sold its technology to
Governments may be the only customers for nuclear waste cleanup, but there isn’t an energy company on earth that wouldn’t buy a cheaper, safer and greener source of energy. That is, if they can believe it.