Kyoto Fusioneering Raises $18.6M in Oversubscribed Rounds
Facilitate the acceleration of R&D and global business development to become a global leader in fusion engineering
Kyoto Fusioneering Ltd – a fusion reactor technology company, based in Kyoto, Japan – raised a total of US$18.6 million in Series B funding and debt financing.
KYOTO, Japan, 02 Feb. 11, 2022 (GLOBE NEWSWIRE) — Kyoto Fusioneering, the first fusion energy startup in Asia and Japan, raised 1.33 billion yen ($11.7 million) in its latest funding round. The oversubscribed Series B funding round was backed by existing investors, Coral Capital Co., and underwritten by five new investors from some of Japan’s largest venture capital firms (in alphabetical order): Daiwa Corporate Investment, DBJ Capital, JAFCO Group, JGC MIRAI Innovation Fund and JIC Venture Growth Investments. This capital increase brings the total amount of funds raised by Kyoto Fusioneering Ltd. at 1.67 billion yen (US$14.7 million).
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Along with this capital investment, KF also entered into unsecured loan agreements totaling 800 million yen (US$7 million) with major Japanese financial institutions such as Kyoto Bank, Sumitomo Mitsui Banking Corporation and MUFG Bank. This agreement strengthens the company’s fundraising capabilities in both equity and debt.
KF will use the funds gained from this investment round, along with the knowledge of its new investors, to accelerate its research and expand its business to capture new areas of the emerging fusion technology market. In particular, KF will use funds for the concentrated development of its plant engineering technologies for plasma heating (gyrotrons) and heat extraction (blankets), which are needed for fusion reactor projects currently in development courses around the world. The company can also accelerate its global expansion to recruit talented engineers and professionals from around the world, including at its UK subsidiary, while expanding its reach by leveraging existing industry capabilities unique to Japan.
Nuclear fusion is a technology with unparalleled potential to solve global energy and environmental problems. Due to the virtually unlimited fuel resource, fusion offers a way to produce large amounts of clean energy while producing zero carbon emissions. Efforts to realize fusion power are now growing on a scale and at a speed never seen before.
Together, a group of nations support the international ITER project (the European Union, Japan, the United States, Russia, Korea, India, the United Kingdom and China), a technological test reactor which will be operated for the first time later this decade. Several countries, such as the United States and China, are also pursuing their own national programs, led by national research institutes. In 2020, the UK government announced its own development program for STEP, a prototype reactor, to be in operation by 2040, for which KF recently secured several contracts to support development. The Japanese government announced more recently that it will formulate a national strategy for nuclear fusion by the summer of 2022.
In addition to government-backed programs, a number of private startups have been created over the past decade. Already, hundreds of billions of yen have been invested by private companies such as Commonwealth fusion systems, Helion Energy, Tokamak Energy. An article recently suggested that 2021 is a breakthrough year for fusion energy. However, it is the coming decade that will see the rapid expansion of the smelting industry and KF’s mission is to drive this expansion into commercialization.
Equity Financing Summary
Series B funding: 1.33 billion yen (cumulative total: 1.67 billion yen)
New subscribers for shares (in alphabetical order, in no particular order)：
- Coral Capital, Inc.
- Daiwa Corporate Investment Co., Ltd.
- DBJ Capital Co., Ltd.
- JAFCO Group Co., Ltd.
- JGC MIRAI Innovation Fund LP
- JIC Venture Growth Investments Co., Ltd.
Existing investors (in alphabetical order)：
- Coral Capital
- Kyoto University Innovation Capital Co., Ltd.
Purpose of funding：
- Accelerate investments in research and development
- Recruitment of engineers and high-level business professionals
- Securing working capital for major projects and business expansion
Coral Capital Founding Partner and CEO James Riley
“Climate change is an existential threat to humanity, and a fusion energy future, if realized, could be the silver bullet that will literally save the world. With Japan’s heavy energy dependence, technological prowess and history with nuclear energy, we believe this country is well positioned to be a world leader in this field. While many startups talk about how they want to change the world, this company actually does. We are excited to support Kyoto Fusioneering again and see their incredible progress towards building a fusion energy future.″
Daiwa Corporate Investment Co., Ltd. Investment Department Associate Director
“Enormous amounts of energy are essential for the continued prosperity of our planet. However, if we are destroying the environment by creating energy, our efforts are not worth it. The development of clean energies is an irreversible trend, with governments and international organizations having declared their intention to decarbonise. In particular, nuclear fusion should be practical in the near future, having been the first being developed in the ITER project. Fusion is not a technology unknown to mankind. Kyoto Fusioneering is made up of cutting-edge science and technology, enabling them to lead the way in fusion power generation. The mission they pursue is a great contribution to the SDGs (Sustainable Development Goals), which we support. We have been paying attention to KF since the last round of their investment and we are very proud to have the opportunity to invest in this project and support the challenge of achieving a carbon neutral society.″
DBJ Capital Co., Ltd. Senior Investment Manager Yoshitake Ishimoto
“We believe that the use of nuclear fusion technology, which can fundamentally solve environmental problems, is essential for the future development of the global energy industry. We decided to invest in Kyoto Fusioneering because it has already expanded its business globally and is highly regarded overseas, and we are attracted by the vision of the management team and the potential for future growth in this domain. We expect KF to become a leading company in the Japanese smelting industry in the near future, and DBJ Capital, as a venture capital firm of a government-affiliated financial institution, wishes to provide strong support for the development of this new industry. .″
JAFCO Group Co., Ltd. Partner Naoki Sato
JAFCO Group Co., Ltd. West Japan Branch Branch Manager Mizuki Takahara
“Carbon neutrality is rapidly becoming a common issue for all of humanity, and we believe it becomes the basis for long-term, large-scale innovation in industry, government and academia. In particular, nuclear fusion offers unparalleled potential. KF management, led by Professor Konishi of Kyoto University, who has long led fusion projects including ITER, strongly sympathized with our desire to support fusion technology through manufacturing. Nuclear fusion research began in earnest soon after the war, and Japan has long been a driving force behind its contribution. With this strong history, the JAFCO Group is fully committed to the adventure in which KF is about to embark.″
JGC MIRAI Innovation Fund
JGC JAPAN CORPORATION Representative Director, Chairman Shoji Yamada
“Nuclear fusion is gaining attention as one of the best energy solutions to today’s global environmental problems. KF is a unique fusion startup and we expect the company to play an important role in making fusion energy a reality. With our investment, we will also seek technological synergies with the JGC Group in the existing energy sector.″
JGC MIRAI Innovation Fund General Partner Global Brain Corporation CEO Yasuhiko Yurimoto
“The global risk of climate change is attracting the attention of the startup industry, and we have decided to invest in Kyoto Fusioneering, which aims to provide society with clean energy from nuclear fusion through a Japanese technology of point. We are impressed with the company’s excellent management and technical staff, and will provide strong support to KF. In particular, we aim to promote smelting technology globally with JGC Group, and at the same time, we will work with KF to realize a decarbonized society.″
Yuki Kuwabara, Senior Director of JIC Venture Growth Investments Co., Ltd.
“Nuclear fusion should be a clean energy source with effectively unlimited resources and low environmental impact. For many years it has been called “mankind’s dream”, and thanks to years of research and development around the world, the dream is finally on its way to becoming a reality. The decision to invest in Kyoto Fusioneering was based on the company’s recognition of its potential to develop state-of-the-art fusion reactor engineering solutions on a global scale, leveraging its long history of research on merger and its network of Japanese companies with unique manufacturing capabilities. We hope this funding will accelerate the company’s growth and ultimately contribute to the practical application of nuclear fusion.″
Summary of Debt Financing
Funding: 800 million yen in unsecured loans
(including undrawn/secured lines of credit)
Sources (in alphabetical order)：
- Kyoto Bank, Ltd.
- MUFG Bank, Ltd.
- Sumitomo Mitsui Banking Corporation
Object of investment：
- To accelerate research and development
- Securing working capital for major projects and business expansion
Brand image renewal
KF is committed to achieving a carbon neutral society through a unique combination of research and business development. To realize fusion energy, it is more essential than ever to work with fusionists around the world to develop engineering solutions in all fields. With this fundraiser, KF took the opportunity to renew its website and corporate logo, in preparation for its expansion in the years to come.
About Kyoto Fusioneering Ltd.
Kyoto Fusioneering is a private tech startup founded in 2019, headquartered in Kyoto, Japan. The company is focused on the development of advanced technologies for commercial fusion reactors, including gyrotron systems, tritium fuel cycle technologies, and breeding blankets for tritium production and power generation. The company focuses on innovative solutions that are both successful and commercially viable. By supporting public and private fusion developers around the world, the company will accelerate the realization of fusion as the ultimate energy source for humanity.