Nuclear startup Deep Fission says it’s going public, again, and I have questions

One quality header this week had a whiff of déjà vu astir it. Nuclear startup Deep Fission announced that it was going public, hoping to garner capitalist enactment to physique subterranean reactors to powerfulness AI information centers.

Wait, didn’t I already constitute that story? I could person sworn that I did. 

Oh right, I did. Last September, Deep Fission said that it had gone nationalist via a reverse merger with Surfside Acquisition, a Delaware ammunition company, a transaction successful which a backstage institution acquires an existing publically listed entity to summation a banal marketplace listing — raising $30 cardinal successful a concurrent backstage placement astatine $3 a share. Now it’s seeking $157 cardinal successful a Nasdaq IPO astatine $24 to $26 a share. You tin spot my confusion.

Turns retired the erstwhile nationalist listing was nationalist successful sanction only. The reverse merger with Surfside was completed, making Deep Fission a reporting institution with SEC obligations, but its banal ne'er really traded. The institution had said it intended to database connected the OTCQB, a marketplace for processing companies that don’t conscionable the listing requirements of large exchanges similar the NYSE oregon Nasdaq. But searches for Deep Fission connected OTCQB don’t instrumentality immoderate results, and the company, successful its S-1, denied that its banal had ever been publically traded.

In effect to questions from TechCrunch, Deep Fission declined to comment, citing the quiescent play earlier its IPO.

Deep Fission’s caller nationalist offering connected Nasdaq is pursuing the much accepted IPO route, with an offering that would worth the institution astatine up to $1.66 billion. It’s a sizable fig for a institution that 1 twelvemonth agone was struggling to rise a $15 cardinal backing round.

Stranger still, the representation painted successful the S-1 filed connected May 20 is arguably bleaker than the 1 outlined successful the December filing with the SEC. Its timeline for turning connected its archetypal reactor has slipped. Further, backmost successful December, it had hoped to execute criticality — the constituent astatine which a atomic concatenation absorption becomes self-sustaining — by July 2026. Now, it won’t supply an estimate. 

Deep Fission does constituent retired that it is drilling a trial well. It has besides mislaid a batch of money. 

One happening that hasn’t changed: The caller S-1 connection contains the aforesaid “going concern” informing contiguous successful December. If Deep Fission doesn’t implicit the IPO, it could tally retired of wealth successful the adjacent 12 months.

In fact, the startup’s fiscal presumption has worsened successful caller months. As of March, its shortage had grown to $88.1 cardinal from $56.2 million. In the past period and a half, the company’s currency and currency equivalents declined by $6.4 million, oregon astir 7%.

On the method front, Deep Fission says it is present prioritizing drilling, possibly a tacit admittance that making holes successful the crushed isn’t arsenic casual arsenic it sounds. 

The institution says it started drilling the archetypal of 3 trial wells in March. The good volition beryllium utilized to cod information “up to 6,000 feet deep.” At 8 inches successful diameter, it’s rather a spot smaller than volition beryllium needed astatine commercialized scale. 

The challenges successful moving from a trial good to commercialized standard are apt to beryllium significant. Deep Fission says it volition request boreholes 30 to 50 inches successful diameter and a mile deep, though it hasn’t settled connected a circumstantial magnitude yet. Even astatine the debased end, its boreholes volition beryllium larger than what’s typically utilized in the lipid and state industry. And until Deep Fission knows however ample of a spread it tin drill, it’ll person a hard clip finalizing its reactor design.

So what has changed since December that would spur a bigger offering astatine a nine-figure valuation? The institution did person an $80 cardinal equity investment, including $20 cardinal from information halfway developer Blue Owl, which besides signed a non-binding MOU for aboriginal powerfulness plants. Still, that wasn’t capable to stave disconnected the going interest warning. It’s imaginable that Deep Fission is sitting connected immoderate affirmative accusation that it omitted from the S-1, though that’s hard to judge fixed what’s riding connected the IPO.

It’s much apt that the institution and its backers are seeking to capitalize connected capitalist excitement implicit fission power. Just past month, atomic fission startup X-energy went nationalist successful an upsized IPO. But dissimilar Deep Fission, X-energy is generating gross and is significantly farther along successful the Nuclear Regulatory Commission’s licensing process — a opposition that serves arsenic a utile reminder that successful a assemblage wherever enthusiasm tin tally good up of method and regulatory reality, valuation and advancement aren’t the aforesaid thing.

It isn’t precisely wide what factors are driving Deep Fission toward its IPO, but technological oregon commercialized advancement doesn’t look to beryllium among them.