Avalanche Energy bets on tiny nuclear fusion

Avalanche Energy is working to develop modular nuclear fusion reactors that could be strung together like battery cells — and it's won backing from the U.S. Defense Department.

Why it matters: The approach, if successful, could unlock near-limitless power for everything from space travel to ocean shipping to long-haul trucking, the Avalanche team tells Axios.

What's happening: The Defense Innovation Unit this month granted a "Prototype Other Transaction" contract to Avalanche Energy to "demonstrate the next generation of nuclear propulsion and power capability for spacecraft."

• The other contract recipient: Ultra Safe Nuclear, which you might recognize from our Hot Deals and It's Personnel rundowns.

Driving the news: Avalanche hopes to develop a reactor roughly the size of a shoe box and send it to space as early as 2027.

Yes, but: Avalanche's $5 million seed round last June amounts to a rounding error for more "traditional" fusion developers like Commonwealth and TAE.

• Commonwealth last year announced a $1.8 billion round. TAE has raised more than $880 million.

Yes, and: Avalanche's investors include Chris Sacca's VC, Lowercarbon Capital, plus Congruent Ventures and Prime Impact Fund, the latter of which led last year's seed round.

What's next: Avalanche hopes to develop a prototype in the next three years — an effort it says could require at least $50 million.

• "It's probably not as easy to raise money now as it was in November," CEO Robin Langtry tells Axios. "But we're talking about huge markets, huge applications. So I think it's still go-time for fusion."