Japan's Nuclear Fusioneering is raising big money to fuel its fusion energy ambitions. Image: company website

On February 2, Kyoto Fusioneering announced it had raised 1.33 billion yen (US$11.7 million) in an oversubscribed Series B funding, the second round of financing arranged for a company by venture capitalists. 

Kyoto Fusioneering is a Japanese engineering company dedicated to solving the problem of global warming through the development of nuclear fusion energy, which produces no carbon dioxide. Spun out of Kyoto University in October 2019, it is Japan’s first fusion energy startup. 

As noted on the company’s website: “Kyoto Fusioneering’s mission is to tackle the reactor engineering and technology challenges, whilst cooperating with fusion developers around the world, to rapidly accelerate the growth of the fusion industry. 

“The company’s business model is to conduct R&D and design of innovative fusion reactor technologies, and to provide these alongside engineering solutions to both private fusion enterprises and publicly-funded fusion programs at global research institutions.”

Combining fusion energy and plant engineering technology, it develops materials, components and power generation systems, and provides engineering and design support to customers around the world.

Kyoto Fusioneering was co-founded by CEO Taka Nagao, Chief Fusioneer [CTO] Satoshi Konishi, Chief Strategist Shutaro Takeda and Chief Innovator & UK director Richard Pearson. They now have about 30 employees.

Taka Nagao, a graduate of and affiliated scientist at Kyoto University, was previously director of Corporate Strategy at Space BD, a Japanese provider of satellite launch and other space utilization services, and director and corporate strategy manager at ENERES, a Japanese energy supply-demand management and distribution services company.

Satoshi Konishi, a professor at Kyoto University’s Institute of Advanced Energy and director of its Institute of Sustainable Science, was previously chairman of the International Coordinating Committee for the ITER Test Blanket Program.

The Kyoto Fusioneering team. Image: company website

ITER is an international organization dedicated to building a nuclear fusion reactor. Its members are China, the European Union, India, Japan, South Korea, Russia, the UK and the United States. 

As described on its website: “The ITER blanket, which covers a surface of 600 m², is one of the most critical and technically challenging components in ITER …

“The 440 blanket modules that completely cover the inner walls of the vacuum vessel protect the steel structure and the superconducting toroidal field magnets from the heat and high-energy neutrons produced by the fusion reactions.

“As the neutrons are slowed in the blanket, their kinetic energy is transformed into heat energy and collected by the water coolant. In a fusion power plant, this energy will be used for electrical power production ….”

Since nuclear fusion reactions can be hotter than the sun, “most critical and technically challenging” is not an understatement. 

Shutaro Takeda, a professor at Kyoto University, has served as an International Program Advisory Committee Member for Fusion Enterprises Workshop at the International Atomic Energy Agency (IAEA) and as an Expert to the Fusion Energy Sciences Advisory Committee of Japan’s Ministry of Education, Culture, Sports, Science and Technology (MEXT).

Richard Pearson has a PhD in Engineering and Innovation from The Open University, UK, an MSc in Nuclear Engineering from Imperial College London, UK, and is a visiting researcher at Kyoto University. He is in charge of the company’s global marketing effort, which has already made significant progress. 

Last October, it was announced that Kyoto Fusioneering had been awarded a contract to provide services to the United Kingdom Atomic Energy Authority (UKAEA) under its Tritium Engineering Framework. Tritium (hydrogen-3) is a radioactive isotope of hydrogen. 

Nuclear Fusioneering equipment. Image: company website.

As noted in the press release:

Under the Tritium Engineering Framework, Kyoto Fusioneering will provide support in the following product areas: 
● Tritium fuel cycle (including exhaust processing, isotope separation and detritiation)
● In-vessel components (including tritium breeding blanket and tritiated waste management) 
● Power infrastructure (including power conversion and auxiliary systems) 
● Materials Capability (including in-vessel materials selection) 
● Lifecycle (including tritium safety and regulation)

In November, the company was awarded a contract to provide the UKAEA with dual-frequency microwave heating sources (gyrotrons) for the Mega Amp Spherical Tokamak (MAST) at Culham in the UK, which is near Oxford.

As explained by the US Department of Energy: “A tokamak is a machine that confines a plasma using magnetic fields in a donut shape that scientists call a torus. Fusion energy scientists believe that tokamaks are the leading plasma confinement concept for future fusion power plants. In a tokamak, magnetic field coils confine plasma particles to allow the plasma to achieve the conditions necessary for fusion.”

Kyoto Fusioneering’s Series B fundraising was underwritten by five of Japan’s top venture capital firms: Daiwa Corporate Investment, DBJ Capital (Development Bank of Japan), JAFCO Group, JGC MIRAI Innovation Fund and JIC Venture Growth Investments. 

Existing investors Coral Capital and Kyoto Innovation Capital also supported the financing, which brought the total amount of equity capital raised by the company to 1.67 billion yen ($14.7 million).

For those interested in the nature of Japanese venture capital:

  • Daiwa Corporate Investment is a venture capital arm of Daiwa Securities Group. 
  • DBJ Capital is owned by the Development Bank of Japan. 
  • Founded in 1973, JAFCO is Japan’s oldest and largest venture capital company. It is a publicly-traded company listed on the Tokyo Stock Exchange.
  • The JGC MIRAI Innovation Fund is owned by Japanese engineering firm JGC and Global Brain Corporation, a venture capital firm headquartered in Tokyo. “Mirai” means “future.”
  • JIC Venture Growth Investments is a fund established by Japan Investment Corporation to provide “risk capital to support next-generation industries in Japan.” 
  • JIC itself is a venture capital group owned by the Japanese government, the Development Bank of Japan and 24 major Japanese corporations. 
  • Coral Capital is an early-stage venture capital firm headquartered in Tokyo. 
  • Kyoto Innovation Capital is a venture capital firm wholly owned by Kyoto University.

Kyoto Fusioneering’s main banks – the Bank of Kyoto, Sumitomo Mitsui Banking Corporation and Mitsubishi UFG Bank – added 800 million yen ($7 million) in unsecured loans (loans that do not require collateral), indicating belief in the company’s creditworthiness and future prospects.

JGC, which is best known for its leading position in LNG plant engineering, says it invested in Kyoto Fusioneering because: “we have determined that by combining Kyoto Fusioneering’s technology with the JGC Group’s engineering technology cultivated in nuclear fusion, low-level radioactive waste treatment, and other nuclear-related fields, we will be able to contribute to the realization of fusion research facilities that are under consideration, as well as to gain a variety of knowledge and know-how for the commercialization of fusion reactor plants.”

Shoji Yamada, president of the JGC MIRAI Innovation Fund, adds: “With our investment, we will also seek technological synergies with the JGC Group in the existing energy industry.”

An artist’s conception of a NuScale nuclear power plant built by combining small modular reactors. Photo: Fluor Corporation

JGC has also invested in NuScale Power, the American designer of small modular nuclear reactors (SMRs) in order to provide engineering, procurement and construction services for SMR plants in cooperation with Fluor, its American engineering partner. 

Kyoto Fusioneering also works with more than 15 other Japanese companies, including Canon Electron Tubes & Devices, Kyocera (fine ceramic components), and JASTEC (Japan Superconductor Technology, a manufacturer of superconducting wires and magnets).

Its success will depend not only on its own design capabilities, but also the precision manufacturing capabilities of Japanese industry.

Scott Foster is an analyst with LightStream Research, Tokyo. Follow him on Twitter: @ScottFo83517667