German fusion start-up Proxima raises €411m, reaches unicorn status

German start-up Proxima Fusion has raised €411 million ($470 million) in a funding round backed by investors including Google and utility RWE, as it seeks to build a commercial fusion power plant by the end of the 2030s.

The funding round values Proxima at more than €2.4 billion, giving it "unicorn" status, the term used for start-ups valued at more than $1 billion. 

It also unlocks a further €400 million in support from the state of Bavaria under an agreement announced in February.

Proxima plans to build its demonstration reactor, known as Alpha, in Garching near Munich by the early 2030s before developing a commercial reactor capable of supplying electricity to the grid later in the decade.

The Alpha project alone is expected to cost around €2 billion. Proxima said it also hopes to secure funding from the German federal government, with a spokeswoman saying the company expects a funding programme to be launched later this year.

The fresh capital will be used to build Alpha, expand research, development and manufacturing capacity and advance key technologies. Production of components for the reactor is already under way, with the first magnet expected to be completed by the end of next year.

Once dominated by governments and international collaborations, fusion research is increasingly being shaped by start-ups pursuing novel approaches to fusion reactor development.

Competition is intense, however. Billions of dollars have already been invested in fusion start-ups in the United States and China.

Fusion energy is generated by fusing atomic nuclei. It is widely regarded as cleaner than nuclear fission because it produces no direct carbon dioxide emissions during operation, unlike fossil fuel power plants.