Hedosophia, a low-profile VC firm founded by financier Ian Osborne, has typically made software-focused bets in startups such as AI-powered voice specialist PolyAI, financial software provider Qonto and ecommerce company Gopuff.
But its latest investment publicly signals a new area of interest for the firm: fusion energy. Hedosophia just led a $100 million Series A for Xcimer, a pre-revenue fusion-tech startup, the company announced Tuesday.
Hedosophia’s leading role in the Xcimer round is a rare glimpse into the firm’s willingness to invest in deep-tech startups, which tend to be much more capital-intensive and require significant research and development to gain revenue traction, compared to lighter-touch software companies. Founded only in 2022, Xcimer is developing a high-energy laser system which aims to bring fusion power to the grid within the next decade.
Xcimer’s founders declined to share a valuation, but the deal size is a major step-up from its seed round, which closed in 2022 on $2.5 million. Also participating in the Series A were leading climate-tech investors Breakthrough Energy Ventures and Lowercarbon Capital, among others.
The fundraising process benefited from having climate-specialist investors and came together in around nine months, according to Conner Galloway, CEO and chief science officer at Xcimer. “Some of our investors have a long time horizon and are specifically interested in deep-tech climate change technologies with a 10 to 20 year investment horizon,” said Galloway, adding that “some of the ultra-high-net-worth LPs at these firms care about climate” and are a driving force behind more climate-tech bets.
As SaaS and fintech valuations slide, climate-tech dealmaking has proven remarkably resilient to the downturn in venture. Fusion energy is still largely commercially untested but has generated accelerating interest from VCs as companies like Commonwealth Fusion Systems and TAE have grown, according to PitchBook research.
Xcimer will use the fresh capital from its all-equity raise to hire an additional 70 people and establish a new prototype laser facility in Denver, according to Xcimer’s president and CTO Alexander Valys. Valys and Galloway first met as roommates at the Massachusetts Institute of Technology.
Hedosophia, set up by Osborne in 2012, closely guards information on its investments and is perhaps most well-known in the industry for having co-founded a SPAC with Social Capital’s Chamath Palihapitiya. In 2021, it was in the midst of raising $1.4 billion across two venture capital funds, Bloomberg reported at the time.
Hedosophia has publicly participated in large rounds for prominent European fintech companies such as Monzo and N26, according to PitchBook data.
Featured image by Artur Debat/Getty Images
