German nuclear fusion startup Proxima Fusion announced Wednesday it raised €130 million ($148 million) in a Series A funding round co-led by Cherry Ventures and Balderton Capital. CNBC reports this represents Europe's largest private fusion investment to date. The Munich-based company plans to build the world's first commercial stellarator-based fusion power plant by the 2030s.

CEO Francesco Sciortino told CNBC the speed of the fundraising was remarkable for European deep tech. The round brings Proxima's total funding to more than €185 million in combined private and public capital since its 2023 founding as a Max Planck Institute for Plasma Physics spinoff.

European Fusion Investment Reaches New Heights

The investment comes amid unprecedented growth in global fusion funding. Nuclear Business Platform data shows private fusion companies have collectively raised over $6.2 billion by early 2025. Four companies account for 85% of total investment, with Commonwealth Fusion Systems leading at over $2 billion raised.

Proxima's funding reflects Europe's determination to compete in the global fusion race. German rival Marvel Fusion recently raised €113 million, while TechCrunch notes most major fusion companies remain US-based. Proxima's CEO emphasized European energy independence as a key motivation for returning from MIT to build the company in Germany.

The stellarator technology Proxima pursues offers advantages over the more common tokamak design. Bloomberg reports stellarators use only external magnets for plasma confinement, potentially enabling more stable continuous operation than tokamaks requiring plasma current.

Commercial Fusion Timeline Accelerates

Industry projections suggest commercial fusion power could arrive sooner than previously expected. Research and Markets forecasts the fusion sector could reach $40-80 billion by 2035 and exceed $350 billion by 2050 if technological milestones are achieved.

Proxima targets demonstrating its magnet technology by 2027, with commercial plant construction in the 2030s. This timeline aligns with competitors including Commonwealth Fusion Systems, which plans SPARC demonstration facility completion by 2027 and commercial deployment by early 2030s.

However, skepticism remains about these ambitious timelines. Scientific American notes most experts believe commercial fusion plants may not feed power into grids until around 2050, with widespread deployment in the second half of the century.

Market Implications for Traditional Energy

The fusion investment surge attracts attention from established energy companies seeking long-term diversification strategies. Greentech Media analysis shows oil giants including Chevron have invested in fusion startups, viewing the technology as potentially preserving their energy sector dominance in a carbon-free future.

Traditional energy companies possess relevant skills for fusion deployment. Commonwealth Fusion Systems' CEO noted fusion systems require power-dense energy generation capabilities similar to refinery construction expertise.

The International Atomic Energy Agency states successful industrial-scale fusion could provide virtually limitless clean, safe and affordable energy meeting global demand. This potential creates both opportunity and disruption risk for existing energy infrastructure.

McKinsey analysis suggests dispatchable zero-carbon generation like fusion could enable European energy systems to consist almost entirely of renewable sources plus dispatchable technologies. Unlike solar and wind, fusion provides consistent baseload power regardless of weather conditions.

The geopolitical implications are significant. Energy security concerns following Russia's Ukraine invasion have accelerated European interest in domestic fusion capabilities. Proxima's funding reflects this strategic priority, with the company maintaining operations across Germany, Switzerland, and the UK while building European talent and supply chains.

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