Japanese fusion energy startup is a venture capital darling

On February 2, Kyoto Fusioneering announced that it had raised 1.33 billion yen ($11.7 million) in an oversubscribed Series B financing, the second round of financing arranged for a company by equity investors. -risk.

Kyoto Fusioneering is a Japanese engineering company dedicated to solving the problem of global warming through the development of nuclear fusion power, which does not produce carbon dioxide. Spun off from Kyoto University in October 2019, it is Japan’s first fusion energy start-up.

As stated on the company’s website: “Kyoto Fusioneering’s mission is to meet the challenges of reactor engineering and technology, while cooperating with fusion developers around the world, to rapidly accelerate the growth of the smelting industry.

“The company’s business model is to conduct R&D and design of innovative fusion reactor technologies, and provide them alongside engineering solutions to private fusion companies and donor-funded fusion programs. public funds in global research institutes.”

Combining fusion energy and plant engineering technology, it develops materials, components and power generation systems, and provides engineering and design support to customers around the world.

Kyoto Fusioneering was co-founded by CEO Taka Nagao, Chief Fusioneer [CTO] Satoshi Konishi, chief strategist Shutaro Takeda and chief innovator and British director Richard Pearson. They now have about thirty employees.

Taka Nagao, a graduate and scientist affiliated with Kyoto University, was previously director of corporate strategy at Space BD, a Japanese provider of satellite launch and other space utilization services, and director and head of corporate strategy at ENERES, a Japanese energy supply and demand company. management and distribution services company.

Satoshi Konishi, a professor at Kyoto University’s Institute for Advanced Energy and director of its Institute for Sustainable Sciences, was previously chairman of the International Coordinating Committee for the ITER Test Blanket program.

The Kyoto Fusioneering team. Photo: company website

ITER is an international organization dedicated to the construction of a nuclear fusion reactor. Its members are China, the European Union, India, Japan, South Korea, Russia, the United Kingdom and the United States.

As described on its website: “The ITER Cover, which covers an area of ​​600 m², is one of the most critical and technically challenging components of ITER…

“The 440 blanket modules that completely cover the inner walls of the vacuum vessel protect the steel structure and the superconducting toroidal field magnets from the heat and high-energy neutrons produced by the fusion reactions.

“As the neutrons are slowed down in the blanket, their kinetic energy is transformed into thermal energy and collected by the cooling water. In a fusion power plant, this energy will be used for the production of electricity….

Since nuclear fusion reactions can be hotter than the sun, “the most critical and technically difficult” is no understatement.

Shutaro Takeda, a professor at Kyoto University, was a member of the International Program Advisory Committee for the Fusion Enterprises Workshop at the International Atomic Energy Agency (IAEA) and an expert on the Science Advisory Committee of Fusion Energy from the Japanese Ministry of Education, Culture, Sport, Science and Technology (MEXT).

Richard Pearson holds a PhD in Engineering and Innovation from The Open University, UK, an MSc in Nuclear Engineering from Imperial College London, UK, and is a Visiting Scholar at the Kyoto University. He is in charge of the company’s global marketing effort, which has already made significant progress.

Last October, it was announced that Kyoto Fusioneering had been awarded a contract to provide services to the UK Atomic Energy Authority (UKAEA) under its tritium engineering framework. Tritium (hydrogen-3) is a radioactive isotope of hydrogen.

Nuclear fusion equipment. Photo: company website.

As stated in the press release:

Under the Tritium Engineering framework, Kyoto Fusioneering will provide support in the following product areas:
● Tritium fuel cycle (including exhaust gas treatment, isotopic separation and detritiation)
● In-vessel components (including tritium cover and tritiated waste management)
● Power infrastructure (including power conversion and auxiliary systems)
● Material capacity (including selection of materials in the tank)
● Life cycle (including tritium safety and regulation)

In November the company won a contract to supply the UKAEA with dual frequency microwave heating sources (gyrotrons) for the Mega Amp Spherical Tokamak (MAST) at Culham in the UK, near Oxford.

As the US Department of Energy explains, “A tokamak is a machine that confines plasma using donut-shaped magnetic fields that scientists call a torus. Fusion power scientists believe that tokamaks are the primary plasma confinement concept for future fusion power plants. In a tokamak, magnetic field coils confine plasma particles to allow the plasma to reach the conditions necessary for fusion.

Kyoto Fusioneering’s Series B fundraising was underwritten by five of Japan’s largest venture capital firms: Daiwa Corporate Investment, DBJ Capital (Development Bank of Japan), JAFCO Group, JGC MIRAI Innovation Fund and JIC Venture Growth Investments.

Existing investors Coral Capital and Kyoto Innovation Capital also backed the funding, bringing the total amount of equity raised by the company to 1.67 billion yen ($14.7 million).

For those interested in the nature of Japanese venture capital:

  • Daiwa Corporate Investment is a venture capital subsidiary of Daiwa Securities Group.
  • DBJ Capital is owned by the Development Bank of Japan.
  • Founded in 1973, JAFCO is Japan’s oldest and largest venture capital firm. It is a publicly traded company listed on the Tokyo Stock Exchange.
  • The JGC MIRAI Innovation Fund is owned by Japanese engineering firm JGC and Global Brain Corporation, a venture capital firm headquartered in Tokyo. “Mirai” means “future”.
  • JIC Venture Growth Investments is a fund established by Japan Investment Corporation to provide “venture capital to support next generation industries in Japan”.
  • JIC itself is a venture capital group owned by the Japanese government, the Development Bank of Japan and 24 major Japanese corporations.
  • Coral Capital is an early stage venture capital firm headquartered in Tokyo.
  • Kyoto Innovation Capital is a venture capital company wholly owned by Kyoto University.

Kyoto Fusioneering’s main banks – Kyoto Bank, Sumitomo Mitsui Banking Corporation and Mitsubishi UFG Bank – added 800 million yen ($7 million) in unsecured loans (loans that do not require collateral), indicating confidence in the company’s solvency and its future prospects.

JGC, which is best known for its leadership position in LNG plant engineering, says it invested in Kyoto Fusioneering because: “we have determined that by combining Kyoto Fusioneering technology with JGC Group engineering technology cultivated in nuclear fusion, low-level radioactive waste processing and other nuclear-related fields, we will be able to contribute to the realization of fusion research facilities which are under consideration, as well as to acquire a variety of knowledge and know-how for the commercialization of fusion reactor plants.

Shoji Yamada, Chairman of the JGC MIRAI Innovation Fund, adds: “With our investment, we will also seek technological synergies with the JGC Group in the existing energy sector.

Artist’s impression of a NuScale nuclear power plant built by combining small modular reactors. Photo: Fluor Corporation

JGC has also invested in NuScale Power, the US designer of small modular nuclear reactors (SMR) to provide engineering, procurement and construction services for SMR power plants in cooperation with Fluor, its US engineering partner.

Kyoto Fusioneering also works with more than 15 other Japanese companies, including Canon Electron Tubes & Devices, Kyocera (fine ceramic components) and JASTEC (Japan Superconductor Technology, a manufacturer of superconducting wires and magnets).

Its success will depend not only on its own design capabilities, but also on the precision manufacturing capabilities of Japanese industry.

Scott Foster is an analyst at LightStream Research, Tokyo. Follow him on Twitter: @ScottFo83517667

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