Nuclear Fusion: Canadian Start-up General Fusion Finds New Investors
Canadian nuclear fusion developer General Fusion is receiving new funding through a stock market listing. The chosen path has a bad reputation.
Demonstration Reactor Lawson Machine 26
(Image: General Fusion)
For over 20 years, General Fusion has been working on controlled nuclear fusion at a fraction of the cost of other projects. In 2009, it was stated that this would be completed within ten years. That didn't quite work out. However, the Lawson Machine 26 (LM26) reactor has been generating plasma since February 2025, and fusion energy is expected to be commercially viable in the coming decade. To ensure they don't run out of money on the way, General Fusion is now going public on the New York Stock Exchange NASDAQ.
Management hopes for just over 300 million US dollars for the company's coffers. However, it's not a classic IPO. Instead, General Fusion has attracted the interest of a SPAC.
A SPAC named SVAC III
SPAC stands for Special Purpose Acquisition Company. Such a company is founded solely to raise money from investors, then to be listed on the stock exchange without any actual business operations, and finally to merge with a company not yet listed on the stock exchange – in this case, General Fusion – within two years. This was in vogue around 2020; for the acquired business, it's a faster and cheaper way to go public. General Fusion is valued at 600 million US dollars in the merger.
Many such SPAC constructs have brought little joy to their investors. The pressure to spend many millions on some acquisition within two years is perhaps not the ideal incentive for making the best investment decision.
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The specific SPAC vehicle is called Spring Valley Acquisition Corp. III (SVAC III). It has raised 230 million US dollars from speculators, who could, however, withdraw their money before the takeover. The organizers of a SPAC are called "sponsors." The same team, under the name Spring Valley Acquisition Corp. (without "III"), took Nuscale Power public via a SPAC merger in 2022. This US start-up develops proprietary small modular nuclear reactors (SMRs). The stock price has been on a rollercoaster in recent months, but after a sharp decline, it is still around double the acquisition price.
Additional Investors
In parallel with the merger with SVAC III, General Fusion has found other investors who are putting in 105 million dollars for preferred convertible shares. They are expected to pay 20 percent more per share than SVAC III offers.
The plan foresees General Fusion receiving a total of 335 million dollars: the 230 million dollars currently in the SVACIII coffers and the 105 million dollars from the additional investors. After deducting transaction costs, this would provide up to 311 million dollars in liquidity.
The existing owners of General Fusion will retain 58 percent of the shares. The SVACIII shareholders will receive 22 percent, and the additional investor group will get just over 13 percent. As a reward for orchestrating the whole deal, nearly seven percent goes to the SPAC sponsor. This stake will approximately triple if the stock price performs well (so-called earnout worth 135 million dollars).
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General Fusion relies on the exotic concept of Magnetized Target Fusion (MTF), a kind of middle ground between other fusion concepts (magnetic confinement and inertial fusion). At General Fusion, a rotating cylinder of liquid metal serves as the reaction chamber, into which hot hydrogen plasma is introduced. Using high-performance explosives, the plasma is compressed and heated to about 100 million degrees. At this temperature, hydrogen atoms can fuse and release energy. This could even work.
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