[The trajectory of startups] Part 2: Kyoto Fusioneering — Taking on the challenge of international competition with manufacturing prowess in fusion energy development

Creating a sun on Earth... Risk capital is flowing into the commercialization of fusion power generation, seen as a trump card for decarbonization, driven by growing awareness of climate change issues. While startups have been emerging in Europe and America since 2000, Kyoto Fusioneering (Ota City, Tokyo Prefecture) was founded in Japan in 2019. By leveraging Japan's manufacturing capabilities and focusing on developing plasma systems that generate fusion reactions and their peripheral equipment, as well as plant engineering, the company is entering the international competition for the development of fusion energy from plasma.

Becoming an entrepreneur to commercialize technology "30 years away"

Fusion power generation uses the energy from helium and neutrons produced when "deuterium" and "tritium," both forms of hydrogen, fuse together. This phenomenon constantly occurs in the sun under extreme gravity and high-temperature conditions. Controlling fusion on Earth—the energy source of the sun and other stars in the universe—has been difficult, and commercialization has been said to be "30 years away" for decades.

Satoshi Konishi, who served as a professor at the Institute of Advanced Energy at Kyoto University, founded Kyoto Fusioneering with the question, "Fusion power generation has advanced to a phase where it is technically feasible. Why hasn't it been commercialized?"

Recently, technological innovations such as advances in superconducting technology, improvements in supercomputer performance for simulations, and the spread of artificial intelligence (AI) have become breakthroughs, accelerating research. The ITER (International Thermonuclear Experimental Reactor) project, a mega international project involving Japan, Europe, America, India and others to realize humanity's first fusion experimental reactor, is under construction in France. Konishi has been participating in ITER as a researcher from the beginning.

Founded through the matching of researcher and business manager

The company was founded in October 2019. That year, Konishi met Taka Nagao, a Kyoto University alumnus who was working at a venture company, through a program organized by Kyoto University's venture capital "Kyoto iCAP" that matched researchers with business managers.

Konishi, an active researcher who served as international representative for blanket (energy conversion and fuel production equipment) research at ITER, knew cutting-edge science and technology. However, he was aware that he lacked business perspective on when to invest resources and when to recover money. He entrusted management to Nagao, seeing him as a "startup professional" who could create a company from scratch and bring it to the growth stage, including business operations, fundraising, legal procedures, and designing HR and management systems.

Recruitment centered on referrals through friends and acquaintances

At the company's establishment, the four co-founders were Konishi and Nagao, plus Shutaro Takeda (now Chief Strategist) and Richard Pearson (now Chief Innovator). Takeda is a former student of Konishi who had published papers on fusion power business and market research. Having continued fusion research for about 45 years, Konishi was among the most senior researchers at the time. That's why he knew all the top players and leaders at universities and research institutions. He approached them saying, "Why don't you change jobs and work with us when you reach re-employment age?"

By March 2023, the fourth year since its founding, the company had grown to about 50 employees and now has over 150. About half are engineers, ranging from people in their 20s to seniors in their 60s and 70s. Most members were recruited through referrals from friends and acquaintances. Konishi's plan is to eventually operate with teams of 300 core members and about 2,000 people overall. They're gathering talent not just in science and engineering, but also in finance, business (sales), legal affairs, accounting, and human resources.

Starting from a garage

The company's first headquarters was in a garage at a home in Uji City, Kyoto Prefecture. They couldn't establish it within the university as it would be a for-profit activity. Shortly after founding, the COVID pandemic began, but technical members and customers were distributed worldwide. Initial members communicated mainly through online meetings. Research and development began as joint research with Kyoto University at their research institute. While generating revenue through design and consulting, they used investment funds to advance technology development for commercialization, repeatedly scaling up equipment. When the equipment became too large for the university, they moved to an industrial park for expansion.

In July 2021, they established a Tokyo office at Mitsubishi Estate's Inspired Lab. In 2023, they moved their registered headquarters to Otemachi, Tokyo. The main reason for moving from Kyoto to Tokyo was the concentration of investors and related companies in Tokyo. As exchanges with international business increased, proximity to Haneda Airport became important for transportation convenience. Wanting to integrate their headquarters and factory, they relocated to Tokyo Ryutsu Center in Ota City, Tokyo Prefecture in 2025.

Preparing content to meet investors' rigorous due diligence

When raising funds, they explain to investors that the energy industry market size in Japan alone is said to be 20-30 trillion yen annually, and that the transition to renewable energy that doesn't emit carbon dioxide is a global challenge.

However, "In the end, they look at the 'people.' They won't invest unless you show determination to make it happen," says Konishi. Investors thoroughly investigate the value of technology and business risks for their evaluation, but the company has hired consultants and investment specialists, properly preparing content in advance to meet investors' rigorous due diligence.

Konishi and co-founders Takeda and Pearson have track records of writing market analysis papers and presenting internationally, with the strength to present numerical analyses of expected power generation demand by region. Having opinions on commercialization and understanding the development strategy of Fusioneering, participating with a "lifetime commitment," Konishi proudly states, "We won't lose in technology, analysis, explanation, or passion."

Engineering the entire plant, including fusion reactor peripherals

The business is "fusion plant engineering." They create the entire plant—not just the fusion reactor but also peripheral equipment. Specifically, the three main systems are: the "plasma heating system (gyrotron system)" that heats deuterium and tritium to plasma state at temperatures over 100 million degrees until fusion occurs; the "fusion heat cycle system" that utilizes heat generated from fusion reactions for power generation; and the "fusion fuel cycle system" that exhausts, separates, and recovers fuel for continuous supply.

The gyrotron system has achieved orders from the UK Atomic Energy Authority, Tokamak Energy, and General Atomics in the US. They're also building a track record in consulting for individual equipment and plant design.

According to a Nikkei survey, Kyoto Fusioneering's estimated corporate value is 72.1 billion yen (as of September 2024), making it recognized as a unicorn candidate (unlisted company worth over $1 billion). Meanwhile, domestically, startups are emerging including Helical Fusion (Chuo City, Tokyo Prefecture) and EX-Fusion (Suita City, Osaka Prefecture). Helical Fusion is developing commercial fusion reactors using the "helical type" that differs from ITER's "tokamak type" for confining plasma with strong magnetic fields. EX-Fusion is a University of Osaka spinoff aiming for fusion energy using the "laser type" that creates instantaneous fusion through high-power laser irradiation.

For heat cycle system development and demonstration, the UNITY-1 project established a power generation test plant in Kumiyama Town, Kyoto Prefecture in 2023, designed for use after extracting fusion energy, aiming to improve the maturity of engineering technology around fusion reactors for heat extraction. That same year, they launched UNITY-2 to develop fuel cycle systems, establishing a joint venture with Canadian Nuclear Laboratories to demonstrate stable and safe fuel supply to fusion reactors under conditions close to the special environment of actual fusion reactors.

Furthermore, they launched the Fusion by Advanced Superconducting Tokamak (FAST) project in 2024 to create the entire fusion plant system. FAST is a project to extract fusion energy from burning plasma, demonstrate plasma maintenance, and identify engineering challenges.

Uniting Japan's industry, government, and academia to win international competition

With a view to achieving carbon neutrality by 2050, the Cabinet Office formulated the "Fusion Energy Innovation Strategy" in 2023 to ensure Japan's timely entry into fusion energy industrialization and global supply chain competition. The Japan Fusion Energy Council (J-fusion), a general incorporated association bringing together willing companies, universities, research institutions, and public organizations, was established in March 2024 to create a fusion energy industry. In June this year, the national Integrated Innovation Strategy 2025 indicated the goal of demonstrating power generation in the 2030s ahead of the world.