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Nuclear startups eye SPACs despite frigid market

illustration of a venn diagram with nuclear sketches and wind power sketches

Illustration: Sarah Grillo/Axios

A group of startups building small nuclear reactors is braving the chilly waters of the SPAC market.

Why it matters: The daring of these companies is being driven by federal incentives and the race to deploy the first wave of small nuclear reactors around the world.

Driving the news: Oklo said yesterday that it plans to go public and raise up to $500 million via a SPAC by merging with AltC Acquisition Corp, a company co-founded by OpenAI CEO Sam Altman. Altman was also an early investor in Oklo and is chairman of its board.

  • Oklo is the third small nuclear startup within 18 months to pursue a SPAC — a form of listing most companies abandoned since that market collapsed in 2022.
  • The others include X-energy, which announced its intentions last December, and NuScale Power, which started trading on the New York Stock Exchange last May.
  • "The gates have flung open and companies and investors see the opportunities opened up by public markets for advanced nuclear," says Brett Rampal, director of nuclear and power strategy for energy think tank Veriten.

By the numbers: According to PitchBook, there are at least 28 companies working on small modular nuclear reactors, or SMRs. Last year, nuclear companies raised some of the bigger private equity rounds in climate tech, including:

  • $830 million for Bill Gates-backed TerraPower, and $250 million for nuclear fusion company TAE Technologies. Those two companies, plus nuclear fusion startup Commonwealth Fusion Systems, are three of the top-10 most well-funded VC-backed clean energy companies out there.
  • PitchBook lists close to 100 investors that have backed at least one nuclear startup, including First Round Capital, Khosla Ventures, and Bill Gates.
  • At the same time, the funding for nuclear startups dropped in the first quarter of 2023 compared to Q1 2o22, which mirrors a similar trend for overall venture investing.

Reality check: The gutsy dive into a tough listing pool is not without its risks. Investors are still very wary, and the actual SPAC market has all but dried up. In 2021, there were 629 SPACs, compared to 28 this year, according to SPACInsider.

  • NuScale's stock rose last summer after it began trading. But as of Tuesday, the Portland, Ore.-based company's shares closed at $7.88 per share, close to half of its peak last year.

Thought bubble: Nuclear investments aren't a natural fit for the venture capital model, given the long timeline to commercialization, the large amount of capital needed for deployment and the strict regulatory environment.

  • Rampal says: "It takes a special kind of investor to make moves into nuclear now. But with risk comes reward."
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