TerraPower is an American nuclear energy company that is developing next generation nuclear reactor technology. As concerns over climate change and energy security rise, TerraPower’s innovative nuclear solutions are garnering increasing attention and investment. With TerraPower being a private company, direct investment opportunities are limited for regular investors. However, there are still several ways to gain exposure to this emerging advanced nuclear technology through public markets. In this article, we will explore the investment case for TerraPower and how both institutional and individual investors can get involved.
TerraPower’s Advanced Nuclear Technology Has Broad Support for Development
TerraPower was founded by billionaire Bill Gates in 2008 to develop safer, more efficient nuclear reactor designs utilizing traveling wave reactor (TWR) technology. The TWRs are fueled by depleted uranium and can run for decades without refueling. In 2021, TerraPower and Duke Energy were awarded a $1.9 billion cost-share grant by the Department of Energy to build an advanced small modular reactor (SMR) demonstration plant in Wyoming by 2028. TerraPower has raised over $750 million to date from investors including Bill Gates, Cheniere Energy, Bezos Expeditions and Breakthrough Energy Ventures. The company is valued at over $4 billion as of 2022. TerraPower’s nuclear solutions have gained bipartisan support in the U.S. and globally as a viable path for clean baseload power to enable the energy transition and mitigate climate change.
Publicly Traded Nuclear Energy Stocks Offer Indirect Exposure
As TerraPower remains a private company for now, public market investors can gain exposure to the growth of advanced nuclear technology through shares of publicly traded uranium mining and nuclear energy companies. Major publicly traded uranium miners include Cameco (CCJ), Energy Fuels (UUUU) and Uranium Energy Corp (UEC) which mine the fuel for nuclear reactors. Publicly traded nuclear power plant operators in the U.S. include NRG Energy (NRG), Duke Energy (DUK), Southern Company (SO) and Exelon (EXC) which operate large nuclear generation portfolios. Abroad, top public nuclear utilities include Électricité de France (EDF) and China General Nuclear (CGN) among others. Many analysts expect growing demand for uranium and nuclear power to drive upside for these stocks as TerraPower’s technology comes online over the next decade.
Investment Firms Offer Venture Capital and Private Equity Exposure
For accredited investors including institutions, family offices and high net worth individuals, direct investment into TerraPower may be possible through venture capital and private equity firms focused on energy technology. Mithril Capital, co-founded by tech billionaire Peter Thiel, was an early TerraPower investor through its flagship fund in 2013. Other TerraPower investors like Breakthrough Energy Ventures, Venrock and Vulcan Capital may have direct co-investment opportunities in upcoming funding rounds. On the private equity side, Brookfield acquired nuclear services firm Westinghouse Electric in 2018 which is partnering with TerraPower on demonstration reactors. Investing in venture/PE funds specialized in energy innovation can provide indirect exposure to nuclear innovators like TerraPower.
Watch for Direct Public Listing or Acquisition in the Future
An initial public offering (IPO) is a potential liquidity event for private investors in TerraPower down the line. However, increasing speculation points to TerraPower eschewing a traditional IPO and opting to go public through a direct listing or via acquisition by a larger firm. A strategic acquirer could be a major utility like Duke Energy expanding its nuclear operations or a large nuclear services provider like Westinghouse. Partners in Asia including Korean industrial giant SK and Japan’s Mitsubishi may also be suitors. Public listing would allow retail investors to access TerraPower stock. Until then, public uranium/nuclear stocks, venture/PE funds and SPACs focused on energy transition remain proxy exposure avenues to capitalizing on the growth in advanced nuclear.
In summary, TerraPower’s innovative reactor technology has strong support for scalable advanced nuclear power to enable the clean energy transition. For investors, shares of uranium miners, nuclear utilities and energy transition focused investment vehicles offer publicly traded exposure to the emerging nuclear renaissance being led by companies like TerraPower. Direct access may be possible for qualified investors through venture capital, private equity firms and eventual public listing.