When the microreactor startup Oklo merged with a blank-check company last year to debut on the New York Stock Exchange, the company said it hoped to raise $300 million on the public market to fund construction of its first power plants and radioactive waste recycling efforts.
While so-called SPAC deals were, at that point, widely criticized as a shortcut to going public that demonstrated that a company’s books couldn’t withstand the scrutiny of a traditional entry to the stock market, the move paid off handsomely for the California-based company. Oklo today is worth nearly $20 billion without any revenue or regulatory approval for its 75-megawatt, liquid sodium-cooled reactor.
But if that’s the result Deep Fission aimed for with its own SPAC deal earlier this month, it may be hard to replicate.
On September 8, the startup — which is proposing to build cylindrical nuclear plants buried one mile underground in 30-inch diameter boreholes — announced plans to carry out a reverse merger with Surfside Acquisition Inc. to go public. But the deal only aimed to raise $30 million by debuting Deep Fission on the lesser-known exchange called OTCQB.
“Having announced three potential sites, one might ask, is $30 million enough to spread around and are the challenges and costs of being a public company worth it in balance?” Brett Rampal, a nuclear industry analyst at the consultancy Veriten, told Latitude Media. “And does the potential for raising enough additional funds exist on this particular market, which seems smaller than some of the other public markets other nuclear companies have entered via SPAC, like the NYSE and NASDAQ?”
n a press release announcing the deal, CEO Liz Muller said the funding would finance construction of Deep Fission’s pilot reactor and help meet its goal of reaching criticality by next July as one of 10 companies selected for the Department of Energy’s latest reactor test program.
“This is a unique moment for the nuclear industry,” she said in a statement. “Deep Fission has the right technology, at the right time, and in the right place.” Deep Fission declined an interview request from Latitude Media.
The relatively small fundraising goal is particularly questionable given that Deep Fission’s 15 megawatt, pressurized water-cooled reactors come with the additional expense of interring nearly 5,300 feet underground. Drilling is expensive — just ask the geothermal companies for whom it marks the largest upfront cost. And strapping a borehole with enough metal and equipment to safely operate a reactor could add significant material costs.
“It’s like rolling dice,” a nuclear industry consultant, who spoke on condition of anonymity to avoid alienating a potential client, told Latitude Media. “That technology is so far-fetched… if something goes wrong, you have to retrieve a reactor from a mile underground? Come on.”
Other recent nuclear SPAC deals have chosen larger stock exchanges. Microreactor startup Terra Innovatum just announced plans to debut next month on the NASDAQ as part of a reverse merger. In March, small modular reactor developer Terrestrial Energy also went public on the NASDAQ via a SPAC.
Like those deals, the Deep Fission IPO highlights the excitement among retail investors to pump money into atomic energy startups even before they build their first reactors, said Chris Gadomski, the lead nuclear analyst at the consultancy BloombergNEF.
“This SPAC transaction is another example of increased investor interest in the nuclear energy space,” he told Latitude Media.
