Breaking Down Helion's $425M Fundraise

Last week, Helion Energy announced a $425 million funding round. This latest raise brings Helion's valuation to $5.4 billion post-money, a major step up from its $3 billion valuation at Series E in 2021.

This milestone comes amid a tough macro environment, with late-stage startup funding dropping 20% year-over-year in 2024. Investors have been doubling down on startups with clear growth and proven profitability (two things fusion definitely isn’t known for), making Helion’s raise even more noteworthy.

The round saw continued support from notable early backers like Sam Altman and Mithril Capital. But it also brought in heavyweight new investors, including SoftBank Vision Fund 2, Lightspeed Venture Partners, and an unnamed "major university endowment.”

Each of these new investors is interesting in its own way:

• Lightspeed typically focuses on enterprise, consumer, health & fintech deals, and has only recently begun betting on fusion startups (starting with an investment in Pacific Fusion in late 2024).

• SoftBank has been making bets on...everything, at questionable valuations. Just recently, the news broke that OpenAI is in talks with Softbank to raise at a $300 billion valuation.

• University endowments seek to moderate risk through diversification; they typically invest in diversified venture capital funds rather than placing concentrated bets on individual startups.

Unless these investors have seen non-public experimental results that justify their optimism, fear of missing out might play a role in their decision to invest at such a lofty valuation.

Why Raise Now?

Access to semiconductors, capacitors, and other key components has been a major bottleneck for Helion, which it aims to solve by investing in its own manufacturing capacity. As CEO David Kirtley highlighted in a recent interview:

Interestingly though, of the 30+ roles open on Helion’s website as of this writing, over a third are focused on core engineering and R&D. This could indicate that supply chain delays are only part of the challenge, and Helion still has plenty of difficult engineering problems to solve.

Unlike conventional fusion approaches that rely on heat and steam turbines, Helion aims to convert fusion energy directly into electricity. While the core science is promising, Helion is still very secretive—even compared to many of the other private fusion startups—and there are questions about how their approach will work at scale. It’s also worth noting that no working prototype produced by Helion has yet achieved breakeven.

The Road Ahead

While most attempts at fusion energy have struggled to make tangible progress, Helion is betting on a radically different approach. And there are reasons to be optimistic. It’s the first private company to announce exceeding 100 million degrees Celsius (a critical engineering milestone) with their 6th generation prototype, Trenta. And with the latest prototype, Polaris, now operational, net energy could be within reach—though commercial viability is still a long way off.