July 24, 2023

Leading European fusion startup offered term sheet to build its tech in US

German startup Marvel Fusion has been offered a term sheet from a US-based entity, with the caveat that it must build its demonstrator in America

German nuclear fusion startup Marvel Fusion has been offered a term sheet from a US-based entity — which, if accepted, would mean the company building its demonstration lab in America. The move comes as European policymakers fight to keep hold of the continent’s climate tech companies in the face of generous subsidies from other nations.

Hendrik Brandis, an investor at Earlybird, the VC firm that led Marvel's last funding round, tells Sifted that Marvel has been offered a term sheet by an unnamed US entity, with the caveat that the company builds its demonstrator — a facility to test the physics that underpin its fusion technology — in the US. 

“The only prerequisite is the demonstrator is going to be in America, not in Europe,” Brandis said. “If we don’t manage to find a respective funding opportunity in Europe, in the next months to come, that Marvel technology, at least, will be gone.” The company's HQ will remain in Munich if the deal goes ahead, Sifted understands.


Marvel declined to comment on the deal. Marvel's last round was a €35m Series A in February last year led by Munich-based Earlybird VC. 

The pull of America

Speaking to Sifted before news of the term sheet broke, Marvel praised the quality of research in Europe, but noted that “European and national funding programmes suffer from high bureaucratic hurdles and a lack of decisive risk-taking”.

A growing number of top European climate tech companies are being tempted over to the US in the wake of the country’s Inflation Reduction Act (IRA) — a $369bn package of subsidies for green technologies. That said, Sifted understands that Marvel's move is not directly linked to the IRA bill, which doesn't subsidise fusion tech. 

Since the IRA was announced last August, several leading European climate tech companies have headed stateside. The continent’s best-funded battery manufacturer, Northvolt, is building a plant in the US (alongside the four in various stages of completion in Europe), and Climeworks, a leading direct air capture startup, also announced plans to begin operations in the US.

Marvel’s tech

Nuclear fusion involves merging two atoms together to generate a huge amount of energy, far more than is created by nuclear fission — the type of nuclear power we’re familiar with today — and with much less radioactive waste.

Marvel shoots ultrashort pulse lasers at a fuel-filled reactor to create the conditions for a fusion reaction. This technology avoids the need for the extremely high temperatures that present an obstacle to many other fusion companies.

The startup uses several publicly funded laser facilities across Europe and the US. It has operations in Germany, Romania, Texas and Colorado. It’s using a laser system at Colorado State University and one at the University of Texas to test its technology.

The company is the fourth best capitalised nuclear fusion startup in Europe, having secured €60m in private capital and €45m in public co-operation projects from the German Federal Agency for Disruptive Innovation (SPRIND). 

The best-funded nuclear fusion startup in Europe is the UK’s First Light Fusion with $101m, closely followed by Tokamak Energy with $100m, according to Dealroom data. Marvel now has a team of 70 people, made up primarily of physicists and engineers.

Monday July 24: This article was amended to include that the company's HQ will remain in Munich and that its move is not linked to the Inflation Reduction Act.


Alexandra Bacon

Alexandra Bacon is an editorial intern at Sifted. Find her on Twitter and LinkedIn

Freya Pratty

Freya Pratty is a senior reporter at Sifted. She covers climate tech, writes our weekly Climate Tech newsletter and works on investigations. Follow her on X and LinkedIn