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Deal Flow Insights
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Hi there,
Here at NZVC we're seeing lots of interesting, early stage deals in New Zealand and wanted to share them with our LPs and early supporters. The intent is to show the energy of the entrepreneurial ecosystem of New Zealand and also get your thoughts, advice and possible investment into some of these companies. Please note these emails do not constitute an endorsement of these companies by NZVC.
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Openstar
www.openstar.tech
Building commercially viable fusion reactors using levitated dipole technology.
Nuclear Fusion Energy / Deep Tech
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The Story
Openstar emerged from a contrarian bet on fusion physics that the US government abandoned in 2011. When MIT's Levitated Dipole Experiment (LDX) lost federal funding, the Wellington-based team saw opportunity where others saw dead ends. Led by founders who believed the levitated dipole approach—the only plasma configuration found naturally in space—offered inherent stability advantages over tokamaks and inertial confinement designs. The company's recent acquisition of Darren Garnier, MIT's former chief experimentalist on the original LDX project, signals their commitment to reviving and commercializing this dormant but promising fusion pathway. Rather than competing directly with billion-dollar tokamak projects, Openstar is betting that nature's own design for stable plasma confinement can unlock simpler, cheaper fusion reactors.
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Market Opportunity
The fusion energy market represents a multi-hundred-billion-dollar opportunity driven by global decarbonization and AI's exponential power demands. However, Openstar's near-term focus on medical isotope production targets a more immediate $9 billion market currently served by just six aging fission reactors—five of which will shut down by 2045. This creates a critical supply shortage for cancer treatments and medical diagnostics, offering a clear commercial pathway before the longer-term transition to fusion power plants.
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Traction
- First Plasma Achievement: Successfully generated 300,000°C plasma for 20 seconds in November 2024, proving the viability of their levitated dipole reactor concept
- Capital Efficiency: Achieved first plasma on approximately $10 million—orders of magnitude less than competitors like Commonwealth Fusion Systems
- Government Backing: Secured a NZ$35 million government loan for their new facility, demonstrating sovereign-level support
- Strategic Hiring: Recruited Darren Garnier from MIT's original levitated dipole program, bringing decades of specialized expertise
- Funding Progress: Raised approximately NZ$24 million to date, currently closing a convertible round to extend runway into Series A negotiations
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Why We're Excited
Openstar represents a rare combination of contrarian physics and capital efficiency in the notoriously expensive fusion race. While competitors burn through billions pursuing tokamak designs, Openstar's levitated dipole approach leverages nature's own blueprint for stable plasma—the same configuration that naturally occurs in planetary magnetospheres. Their recent first plasma achievement on a fraction of competitors' budgets suggests this approach may be fundamentally more cost-effective. What particularly compelling is their pragmatic commercialization strategy. Rather than promising power plants in decades, they're targeting the immediate medical isotope crisis as their minimum viable product. With five of six global production reactors shutting down by 2045, there's urgent market demand and a clear revenue pathway within 7-10 years. As early investors, we're positioned at valuations orders of magnitude below public fusion companies, with exposure to a technology that—if it works—could leapfrog the entire industry through superior physics rather than incremental engineering improvements.
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