Facilitating Acceleration of R&D and Global Business Development to Become a World-leading Fusion Engineering Company
Kyoto Fusioneering Ltd – a fusion reactor technology company, based in Kyoto, Japan – has raised a total of US$18.6M in Series B funding and debt financing.
KYOTO, Japan (GLOBE NEWSWIRE) — Kyoto Fusioneering, the first fusion energy startup in Asia and Japan, has raised 1.33 billion yen (US$ 11.7 million) in its latest round of funding. The oversubscribed series B funding round was supported by existing investors, Coral Capital Co., and underwritten by five new investors from some of Japan’s top VC 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. to 1.67 billion yen (US$ 14.7 million).
Alongside this capital investment, KF has also arranged unsecured loan agreements totaling 800 million yen (US$ 7 million) with major Japanese financial institutions such as the Bank of Kyoto, Sumitomo Mitsui Banking Corporation, and MUFG Bank. This agreement strengthens the company’s fundraising capabilities in terms of both equity and debt financing.
KF will use the funds acquired through this investment round, as well as the knowledge of its new investors, to accelerate its research and expand the business to capture new areas of the budding 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 required for fusion reactor projects currently under development worldwide. The company can also accelerate its global expansion to recruit talented engineers and business professionals globally, including at its subsidiary in the UK, whilst at the same time furthering its reach by leveraging existing industrial capabilities unique to Japan.
Nuclear fusion is a technology with unparalleled potential to solve the world’s energy and environmental problems. Due to the virtually unlimited fuel resource, fusion offers a way to produce vast amounts of clean energy whilst producing no carbon emissions. Efforts to realise fusion energy are currently developing at a scale and speed never seen before.
Together, a group of nations are supporting the international ITER project (the European Union, Japan, the United States, Russia, Korea, India, the UK, and China), a technology test reactor which will be first operated later this decade. Several nations, such as the U.S. and China, are also pursuing their own domestic programs, led out of national research institutes. In 2020, the U.K. government announced its own program to develop STEP, a prototype reactor, to be operated by 2040, for which KF has recently been awarded several contracts to support development. The Japanese government more recently announced 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 established over the last decade or so. 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 was a breakthrough year for fusion energy. However, it is the decade ahead which will see the rapid expansion of the fusion industry and KF’s mission is to drive this expansion towards commercialization.
Summary of Equity Financing
Series B Financing: 1.33 billion yen (Cumulative total: 1.67 billion yen)
New Equity Subscribers (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 L.P.
- JIC Venture Growth Investments Co., Ltd.
Existing investors (in alphabetical order) ：
- Coral Capital
- Kyoto University Innovation Capital Co., Ltd.
Purpose of the Funding：
- Accelerating investment in research and development
- Recruitment of top-level global engineers and business professionals
- Securing working capital for large projects and business expansion
Coral Capital Founding Partner & CEO James Riney
“Climate change is an existential threat to humanity, and a fusion energy future, if achieved, could be the silver bullet that literally saves the world. With Japan’s high energy dependency, technological prowess, and history with nuclear energy, we believe that this country is well positioned to be a global leader in this space. While many startups talk about how they want to change the world, this company is actually doing it. We’re excited to back Kyoto Fusioneering once again, and to see their incredible progress toward building out a fusion energy future.″
Daiwa Corporate Investment Co., Ltd. Investment Department Associate Director
“Huge amounts of energy are essential for the continued prosperity of our planet. However, if we destroy the environment in creating energy, our efforts will not be worthwhile. The development of clean energy is an irreversible trend, as governments and international organisations have made clear their intention to decarbonise. In particular, nuclear fusion is expected to be practical in the near future, having been first under development in the ITER project. Fusion is not a technology that is unknown to humanity. Kyoto Fusioneering is made up of world-leading scientists and technologies, both of which allows them to lead the way in fusion power generation. The mission they are pursuing 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 to achieve 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 world’s energy industry. We decided to invest in Kyoto Fusioneering because it has already expanded its business globally and is highly regarded abroad, and we are attracted by the vision of the management team and the potential for further growth in this area. We expect that KF will grow into a leading company in the Japanese fusion industry in the near future, and DBJ Capital, as a venture capital company of a government-affiliated financial institution, would like 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 Office Branch Manager Mizuki Takahara
“Carbon neutrality is fast becoming a common issue for all of humanity, and we feel that it is becoming the basis for long-term, large-scale innovation across industry, government and academia. In particular, nuclear fusion offers unparalleled potential. The management of KF, led by Prof. Konishi of Kyoto University, who has been leading fusion projects including ITER for a long time, strongly sympathized with our desire to support fusion technology through manufacturing. Research into nuclear fusion began in earnest shortly after the war, and Japan has long been a driving force behind its contribution. With this strong history in mind, JAFCO Group is fully committed to the adventure that KF is about to embark on.″
JGC MIRAI Innovation Fund
JGC JAPAN CORPORATION Representative Director, President Shoji Yamada
“Nuclear fusion is attracting attention as one of the best energy solutions to current global environmental problems. KF is a unique fusion start-up and we expect the company to play an important role in making fusion power a reality. With our investment, we will also seek technological synergies with the JGC Group in the existing energy industry.″
JGC MIRAI Innovation Fund General Partner Global Brain Corporation CEO Yasuhiko Yurimoto
“The global risk of climate change is attracting attention in the startup industry, and we have decided to invest in Kyoto Fusioneering, which aims to deliver clean energy from nuclear fusion to society through advanced Japanese technology. We are impressed by the excellent management and technical personnel in the company, and we will provide strong support to KF. In particular, we aim to promote fusion technology globally with the JGC Group, and at the same time, we will work together with KF to realize a decarbonized society.″
JIC Venture Growth Investments Co., Ltd. Principal Yuki Kuwabara
“Nuclear fusion is expected to be a clean energy source with effectively unlimited resources and a low environmental impact. For many years it has been called “humankind’s dream”, and thanks to years of research and development around the world, the dream is finally on the path to becoming a reality. The decision to invest in Kyoto Fusioneering was based on the company’s recognition of its potential to develop world-leading engineering solutions for fusion reactors on a global scale, leveraging its long history of fusion research and its network of Japanese companies with unique manufacturing capabilities. We hope that this funding will accelerate the company’s growth and will ultimately contribute to the practical application of nuclear fusion.″
Summary of Debt Financing
Financing: 800 million yen in unsecured loans
(including undrawn/underwritten lines of credit)
Sources (in alphabetical order) ：
- The Bank of Kyoto, Ltd.
- MUFG Bank, Ltd.
- Sumitomo Mitsui Banking Corporation
Purpose of the investment：
- To accelerate research and development
- To secure working capital for large projects and business expansion
Renewal of the Corporate Brand
KF is committed to achieving a carbon-neutral society through a unique combination of research and business development. To realise fusion energy, it is more essential than ever to work with fusioneers from all over the world to develop engineering solutions in all fields. With this fundraising round, KF has taken the opportunity to renew its corporate website and company logo, in preparation for its expansion in the years ahead.