Valar Atomics, a startup that makes small modular nuclear reactors (SMRs) — essentially tiny, factory-built power plants designed to be cheaper and faster to deploy than traditional reactors — is in talks to raise a new round of capital, according to three sources familiar with the company. The three-year-old company is seeking a valuation of about $6 billion, and Sequoia is expected to lead the deal, the people said.
The Information was the first to report the funding talks, including that the El Segundo, Calif., startup is raising a $1 billion equity round.
Some of that capital was previously raised at a lower valuation, the people told TechCrunch. Specifically, Valar has raised $450 million — including $340 million in equity and $110 million in debt — at a $2 billion valuation, per Bloomberg report in March.
Deals structured in multiple tranches at different valuations, occasionally executed at different times, are becoming increasingly common in today’s AI-powered fundraising environment. These agreements can create the perception that capital is invested at a single, uniform valuation. In fact, investors in the same round may end up paying different prices for the same company—a distinction that matters more than ever as outsiders try to compare the “hot” startups against each other.
Sequoia and Valar Atomics declined to comment.
Earlier this month, the company showed its nuclear reactor providing a small amount of power to an Nvidia AI chip. Concurrent with this proof-of-concept demonstration, Valar and Nvidia announced a partnership to explore the development of nuclear power to power future AI data centers.
The rise of the Valar responds to a wider crisis of demand. Electricity needs for data centers are projected to increase sharply over the next several years, and utilities in many regions are years away from adding enough new capacity. That gap has turned nuclear power—long plagued by cost overruns and regulatory bottlenecks—into one of the more wary corners of the AI infrastructure explosion.
Valar counts Palmer Luckey, the founder of Anduril, and Shyam Sankar, the chief technology officer of Palantir, among its backers. Others chasing the opportunity include Kairos Power and TerraPower (backed by Bill Gates), which build next-generation reactors aimed at technology and industrial customers, and NuScale Power, the only SMR developer with design approval from US regulators. (Last year he won approval for an upgraded higher efficiency reactor design.)
Valar’s technology is based on a high-temperature helium-cooled gas reactor. The company says it plans to eventually build hundreds of SMRs to power data centers. But while SMRs are theoretically cheaper to build than traditional reactors, the technology is still nascent and it is far from clear how long it will take to develop it on an industrial scale.
In the background, Valar has taken an aggressive legal stance against its regulator. Last year, it joined several states and rival startups is suing the Nuclear Regulatory Commissionarguing that the agency is incorrectly applying the same lengthy permitting process to small test reactors that it uses for full-size commercial facilities. (The case has not been resolved, with the two sides repeatedly dropping the litigation, suggesting some sort of settlement is in the works.)
The company was founded by Isaiah Taylor, who dropped out of high school when he was 16 years old. The now 27-year-old said he started two start-ups before the Valar and proudly shared that his grandsire worked as a nuclear physicist on the Manhattan Project.
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