German Fusion Startup Lands €400M Deal
German fusion startup Proxima Fusion has secured a €400M Memorandum of Understanding from Bavaria to build the world's first commercial fusion plant. The deal, backed by top VCs, signals strong government support for ambitious deep-tech and hardware startups amid debates on energy security.
Proxima Fusion is a 2023 spin-out from Germany's Max Planck Institute for Plasma Physics (IPP), founded by former scientists and engineers from IPP, MIT, and Google-X. The company has quickly grown to over 90 employees and is building on decades of public research from the IPP's Wendelstein 7-X (W7-X) experiment, the world's most advanced stellarator. The €400M from Bavaria is part of a larger €2 billion plan for a next-generation stellarator test facility called "Alpha." Proxima Fusion is expected to contribute €400M through private investment, with the remaining €1.2B anticipated from the German federal government later this year. This aligns with Germany's "Fusion Action Plan," which will invest over €2 billion by 2029 to accelerate commercial fusion. Proxima focuses on a "quasi-isodynamic (QI) stellarator" design, which uses complex, 3D-shaped magnetic coils to confine plasma. Unlike the more common tokamak design, stellarators are designed for stable, continuous operation, avoiding disruptions that can limit performance. The company's roadmap includes the Alpha demonstration reactor in Garching, aiming to be the first stellarator to show a net energy gain by the early 2030s. Success there would lead to "Stellaris," the first commercial fusion plant, planned for the site of a former nuclear power station in Gundremmingen in partnership with utility company RWE. Prior to this deal, Proxima Fusion had already raised significant private capital. This includes a €7.5 million pre-seed round and a €20 million seed round from notable VCs like Plural Platform, UVC Partners, and redalpine. The project is part of a broader European push for energy independence. To support this, Proxima has launched the Alpha Alliance, a consortium of over 30 partners, including Siemens Energy, RWE, and Thales, to coordinate supply chains and industrialize fusion manufacturing.
