Indicators are mounting that Commonwealth Fusion Systems (CFS), the best-funded startup in the nuclear fusion energy field, may be headed for an initial public offering within the next two or three years. The company has raised $4 billion from investors over the past seven years, including the $1 billion it announced raising now, while its operational developments and appointment of a new chief financial officer are fueling speculation about the potential timing of the offering.
The appointment of Lorence Kim as chief financial officer this week was the most prominent of these developments. Kim held the same position at Moderna, the biotechnology company specializing in messenger RNA treatments, joining it in 2014 and later helping it enter the stock market in December 2018. He remained at the company for another year and a half before returning to investing in the biotechnology sector.
Kim said he sees “something very familiar” in CFS, writing in a LinkedIn post that nuclear fusion today resembles what messenger RNA technologies were a decade ago: scientifically real, but not yet commercially proven, and closer to application than conventional wisdom believes.
A Financial Appointment Does Not Necessarily Mean IPO Preparations Have Begun
Kim’s background in biotechnology may appear unconventional, but it is not unprecedented in the fusion sector. Eric Lander, who helped lead the Human Genome Project, co-founded Pacific Fusion and currently serves as its chief executive officer.
Christine Dunn, CFS’s head of external communications, said Kim has unique experience bringing a new product with a clear mission to the world, operating at the intersection of deep science and scientific breakthroughs, geopolitical urgency, and rapid, large-scale deployment. But she added that his arrival does not necessarily mean the company has begun preparations for an initial public offering.
Moderna took four and a half years to reach its IPO after Kim joined it. Nevertheless, TechCrunch’s analysis suggests that CFS may move within a shorter period, given its current progress and the arrival of its new CFO, despite the company’s denial of a direct connection between the appointment and plans for an offering.
Why Might the Path Be Shorter Than Moderna’s Experience?
Nuclear fusion differs from the development of medical treatments in a fundamental regulatory respect. The treatments Moderna develops cannot reach the market before receiving approval from the U.S. Food and Drug Administration, which requires data from lengthy and expensive clinical trials because human lives are directly at risk.
Fusion reactors, by contrast, shut down when reactions fail rather than undergoing a catastrophic nuclear meltdown, making them safer than nuclear fission reactors. On that basis, federal regulators have established guidelines specifically for the fusion sector that differ from the rules applied to the fission sector. The analysis argues that this gives CFS greater control over its timeline.
Sparc’s Progress and the Start of the Arc Plant
CFS continues to make progress on Sparc, its experimental reactor. The company had previously hoped to operate the device by 2025, but now targets launching it later this year. Although large, first-of-their-kind projects can face delays, CFS has managed to keep those delays within non-excessive limits, according to the article.
The company hopes that Sparc will reach scientific breakeven by next year, meaning that the fusion reactions produce more energy than is required to initiate the reaction. So far, only one test has achieved this milestone, so reaching it could help CFS convince investors that it is making steady progress toward commercialization.
Alongside Sparc, CFS has begun work on the Arc plant for commercial-scale power generation. The company selected a site for the plant in Chesterfield County, Virginia, and has begun obtaining the necessary permits. It targets putting Arc into operation in the early 2030s.
A Window of Investor Interest
Even if CFS goes public in the coming years, it will still face years of substantial spending. From this perspective, appointing Kim may be an appropriate step, given that he oversaw Moderna during its early years as a public company, when it was reporting losses before the pandemic generated extraordinary and unexpected profits for the company.
The analysis connects that experience with the current boom in artificial-intelligence data centers, which could in turn represent an extraordinary event that increases demand for electricity. CFS may therefore want to move before investor appetite declines. However, this hypothesis does not mean that the company has announced a date for an offering; it remains an estimate based on recent developments and sources TechCrunch spoke with over the past several months.
The fusion sector itself is also making moves toward the public markets. General Fusion entered the stock market through a special purpose acquisition company deal earlier this month, while TAE Technologies will do so by merging with Trump Media and Technology Group.
CFS is benefiting from technology companies’ interest in energy, having already sold half the output of its first power plant to Google. But IPO windows do not last forever, which could prompt the company to take advantage of current conditions if it determines that investor interest and demand for electricity offer favorable timing.