The UK Government has announced £20 million to kickstart ‘Starmaker One’ – a British private fusion investment fund that it hopes will help fusion businesses and start-ups in the sector grow and commercialise at scale.

Describing the funding as a ‘first of its kind’ partnership between the public sector and fusion private venture capital funds, the deal is expected to unlock further investment from the private sector as the fusion industry grows.

The Government said that the cash injection will give the private sector confidence to invest in fusion, ensuring the UK can compete globally in the race to develop an unlimited source of energy.

Government figures suggest that the Starmaker partnership has the potential to raise between £100 million and £150 million overall, with East X Ventures set to act as fund manager.

As part of the Government’s investment strategy, the fund will allow small fusion companies to train their workforce in areas like physics, engineering and chemistry, while also supporting the development of new tech to capitalise on fusion energy in markets such as magnetics, industrial AI, robotics, healthcare, transportation and energy storage.

“Fusion has the potential to provide us with energy security, whilst attracting the best technologies to our shores and training up the next generation of British scientists and engineers,” said the energy secretary, Ed Miliband.

“We are backing both nuclear and fusion power, and today we take a step forward in growing this exciting industry.”

Investment in Starmaker One signals the first early-stage fusion energy venture capital fund outside the US, and follows the recently announced £40.5 million joint fusion project between the US and UK with Tokamak Energy. 

The Government already made a £410 million commitment to the rapid development of UK fusion energy in January, forming part of its Plan for Change.

That funding was earmarked for investment in the skills needed for scientists, engineers, welders and programme managers to enter the industry, as well as for support in the construction of a prototype fusion energy plant in Nottinghamshire by 2040. 

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Already a key industry in the Oxford-Cambridge Growth Corridor, independent research from London Economics shows that the wider economy gets back nearly £4 for every £1 invested in fusion, although the Government would like to ramp up this production to export into the global fusion market, expected to be worth trillions of pounds in the future.

“Fusion energy is a technology with enormous potential, and an industry in which the UK is already well established,” said Patrick Vallance, minister for science.

“This investment will help to unlock the funding the fusion industry needs to grow, which will boost regions across the UK such as Nottinghamshire and South Yorkshire, and in Culham in Oxfordshire, the epicentre of UK fusion.”