The field of startups working on next-generation small modular nuclear reactors is due for a wave of consolidation, the CEO of one leading enterprise in the sector told Semafor. X-energy, an SMR startup backed by Amazon, closed one of the largest-ever fundraising rounds for that technology on Monday, locking in $700 million from a group of venture and private equity firms that pushed its total capital base to more than $1.5 billion.
In an increasingly crowded landscape of competing SMR startups, many of which are raising hundreds of millions of dollars, X-energy stands out for the number of deals it has already closed, set to build about 150 reactors in the US and UK for Amazon and others. Compared to a few years ago, Wall Street is becoming much more open to SMRs, X-energy CEO Clay Sells said: The technologies are more developed, political support is more consistent, the pull of data center demand is more urgent, and more investors are getting educated.
But it won’t be easy to successfully construct the first commercial-scale facilities, he warned, and more investment is needed in the upstream companies supplying SMR makers with materials and equipment. So by the time SMRs can actually function as a new backbone of data center power demand, some investors are likely to get burned: “I do think there’s going to be a natural consolidation,” he said.