Energy company General Fusion is struggling to go public in a $1 billion reverse merger

Last year, fusion energy startup General Fusion was struggling to raise money, laying off at least 25% of its employees before securing a $22 million lifeline investment while it figured out how to keep the company afloat.

General Fusion today revealed its survival plan: It will go public through a reverse merger with a special purpose acquisition company, Spring Valley III, as well as additional investments from institutional investors. It’s a major change in fortunes for the company whose CEO wrote a public letter last year asking for funding.

If the deal closes as planned, General Fusion could receive up to $335 million from the deal, more than double what it was said to be seeking to raise last year before receiving the $22 million lifeline.

General Fusion said the deal would value the combined company at about $1 billion. Before announcing the merger. The merger startup, founded in 2002, had previously raised more than $440 million, according to PitchBook.

General Fusion plans to use the funds to complete its experimental reactor, Lawson Machine 26 (LM26). The device uses a technique called “inertial confinement,” which works by compressing the fuel pellet until its atoms fuse together, releasing energy in the process. The National Ignition Facility has used inertial confinement in successful fusion experiments, using lasers to bombard fuel pellets to unleash the pressure force.

However, the LM26 avoids the use of lasers. Instead, it uses steam-powered pistons that push a wall of liquid lithium metal inward to compress the fuel pellets. This liquid lithium then circulates through a heat exchanger, which generates steam to power the generator. By avoiding the use of expensive lasers or superconducting magnets, required in other fusion reactor designs, General Fusion hopes to build a fusion power plant at a lower cost. But first the company must prove that its approach is workable.

Last year, before revealing its financial woes, General Fusion said that in 2026, LM26 would reach scientific break-even, where the fusion reaction generates more energy than is needed to get it started. Scientific breakeven is a key milestone, although different from and easier to achieve than commercial breakeven, as fusion reactions release enough energy to export electricity to the grid. General Fusion did not respond to a request asking if its schedule had changed.

The buyout firm, Spring Valley, specializes in reverse mergers with energy companies. It previously took NuScale Power, a small modular nuclear reactor company, public in a deal whose stock price has since fallen more than 50% from its peak last year. The company is also in the midst of completing a merger with Eagle Energy Metals, a uranium mining company that is also supposed to develop its own SMR.

General Fusion is not the first merger company to go public. In December, TAE Technologies announced that it would merge with Trump Media & Technology Group in a deal that values ​​the combined company at more than $6 billion.

The common thread that connects these deals is, of course, data centers. It is expected to consume nearly 300% more energy by 2035, according to BloombergNEF, and General Fusion explicitly cites the high energy demand in data centers in its merger announcement.

But the company also pointed to broader electrification trends, including electric vehicles and electric heating, which could increase overall electricity demand by up to 50% by 2035. It’s a reminder that while the Trump administration has cast doubt on an electrified future, other countries are moving forward. While General Fusion may face technological challenges, trends in the energy world suggest that if it can provide nuclear fusion power at a reasonable cost, it will find plenty of willing buyers.