Electricity demand – and prices – are climbing rapidly, while the clean firm technologies that could provide new electrons, increase grid resiliency, and promote energy security remain difficult to finance and deploy. You’ve heard it before, the “valley of death” — the stretch where a technology has moved past the early-stages where venture capital normally comes in, but is still too unproven or risky for project finance. Clean energy startups often get stuck here, unable to raise the capital to go from development to demonstration to commercial scale.

There are, however, exceptions. Take two clean firm companies that recently broke through: Fervo Energy and X-energy. Both went public in 2026 with multi-billion-dollar valuations and have project financing in motion. 

The question is, why? 

Did Fervo and X-energy just get lucky? Or is there a larger pattern behind their success worth examining? The story is how these companies working on capital-intensive, hard energy technologies accessed, and successfully utilized, three pools of capital: government funding, philanthropic dollars, and private capital markets.

Each of these pools is built to hold a different kind of risk, and none can do the job alone. Government funding can de-risk a technology through research, development, and demonstration funding that no private investor can support. Philanthropically backed impact investors can absorb risk that return-seeking capital cannot. Policy-focused philanthropy can unlock barriers to deployment. And private capital can utilize innovative financing mechanisms and new partnerships that share financial risk to pursue first-of-a-kind (FOAK) clean firm projects. When that allocation doesn’t happen deliberately, projects stall. The bottleneck is more about coordination than it is about capital.

Fervo and X-energy aren’t the story here. The sequence is. All three pools are showing up for both companies, in the right order, and that’s the roadmap any company should tap into to get their solutions closer to market.

Fervo: Advancing Next-Generation Geothermal

Many people who know Fervo today know it for its May 2026 IPO that saw its market value surpass $10 billion. But before Fervo became the leading next-generation geothermal company, a research grant from Stanford’s TomKat Center backed the idea that oil-and-gas drilling techniques could unlock geothermal energy anywhere. A fellowship from the nonprofit Activate.org put co-founder Jack Norbeck inside Lawrence Berkeley National Lab’s Cyclotron Road program for two years — lab access, mentorship, and time to prove the concept. Fervo’s next stop was Utah, next door to FORGE, a DOE-funded geothermal field laboratory testing innovative technologies and de-risking the subsurface geology. Then came a $25 million grant to help kickstart Cape Station, soon-to-be the world’s largest geothermal plant. But at this stage the risk was still too early and too technical for project finance to underwrite.

Enter catalytic capital. Between 2019 and 2022 Fervo raised Series A, B, and C rounds totaling over $150M, with investors including BHP Ventures, Breakthrough Energy Ventures, Impact Science Ventures, Congruent Ventures, Elemental Excelerator, Capricorn’s Technology Impact Fund, DCVC, and Prelude Ventures, plus early angels like Jeff Bezos, Richard Branson, Bill Gates, and Masayoshi Son.  Importantly, Fervo also received $100 million in project-level preferred equity from Breakthrough Energy Catalyst, a since-sunset program within the larger Breakthrough Energy network that had focused on accelerating next-generation technologies from proof-of-concept to finance-ready infrastructure.

Philanthropy’s role extended to policy, too. Over the past few years, the groundwork for this outcome was laid by philanthropically backed advocacy groups clearing barriers to enable future geothermal development. They advocated for new categorical exclusions for geothermal exploration and resource confirmation activities, supported comprehensive permitting reform on Capitol Hill, and helped unlock the biggest funding opportunity at DOE to date.  

These investors and philanthropists appropriately underwrote and retired the early-stage risks they were mandated to take, plugged a key tranche in Fervo’s Project finance stack, and advanced Fervo’s path to the next layer of capital providers taking project-level risk.

Next, Private financing and later-stage capital providers entered with $421 million in project debt, a Series E, and a public listing supported by large banks like JPMorganChase. By the time private capital arrived at this scale, government and philanthropic capital had already absorbed the early technology, subsurface, and permitting risk that venture and infrastructure investors often find difficult to take on with sufficient capital, clearing the way for private capital markets to do what they does best: scale.

That collaboration mattered to corporate buyers, too. Google’s relationship with Fervo began as a 2021 pilot agreement and converted, by May 2025, into a binding 115 megawatt power purchase agreement to supply their Nevada data centers, approved by state regulators under a new Clean Transition Tariff structure. More recently, Google announced an additional 396-megawatt (MW) power purchase agreement with Fervo, with an option to expand its offtake by another 600 MW by June 2030. Google’s willingness to commit reflected the confidence built by years of government and philanthropic capital de-risking the technology before Fervo ever asked a hyperscaler to sign.

It’s not just geothermal — take a look at advanced nuclear.

X-energy shows the same pattern in a different clean firm technology. Founded in 2009 by Kam Ghaffarian, the company spent over a decade advancing its high-temperature gas-cooled reactor design before DOE’s Advanced Reactor Demonstration Program stepped in, committing over $1 billion in reimbursement on a 50/50 cost share.  That cost share structure is itself a form of risk allocation with DOE holding the early technology risk that private capital wasn’t yet mandated to underwrite alone. DOE’s HALEU Availability Program is also supporting their fuel supply by providing initial HALEU to power their reactor project with Dow Chemical.

The federal government’s commitment made the technology credible enough for private capital to follow: Amazon anchored a roughly $500 million round in 2024 alongside Citadel’s Ken Griffin, Ares Management, and NGP; a $700 million round followed in 2025, backed by firms like Jane Street and ARK Invest; and X-energy went public in 2026, raising more than $1 billion in its IPO. That capital is following a four-unit plant at Dow’s Seadrift site in Texas, where Dow signed on as X-energy’s commercial offtaker; the Cascade Advanced Energy Facility in Washington, developed with Energy Northwest and backed by Amazon’s commitment to purchase up to 5 gigawatts by 2039; and a joint development agreement with the UK’s Centrica for up to 6 gigawatts — a pipeline exceeding 11 gigawatts in total. 

In philanthropy, a handful of donors over the last decade have invested in advocacy organizations, successfully unlocking policy barriers standing between advanced nuclear and the market.

We’re not there yet — we need a movement.

FOAK projects remain exceedingly difficult to finance: banks and want assets with an operating track record and predictable cash flows, and infrastructure funds want technologies that are already mature. Most next-generation clean firm solutions sit outside  — they’ve cleared the lab and even the pilot stage, but haven’t yet proven the kind of repeatable, at-scale commercial operation that lets a bank or infrastructure investor treat them as a known quantity. That’s the missing middle: a real gap, in the middle stages of the innovation lifecycle, for technologies that need catalytic, strategic, and scale capital working in sequence and haven’t gotten it.

Fervo and X-energy prove this sequence can work. It worked because government, philanthropy, and private capital (from venture to late-stage) moved in the right order. Making it repeatable means agreeing upfront — before any capital moves — on who holds which risk. We need this to become a movement — these three sectors moving in lockstep, at a scale we haven’t seen before. 

Government needs to act as a first mover, not just a private-sector enabler. We need a whole-of-government approach to clean firm power, treating it as a national priority for energy security, grid resilience, economic competitiveness, and affordable electricity. It should be backed by large-scale, consistent, multi-year investment across all clean firm solutions like advanced nuclear, fusion, long-duration storage, next-gen geothermal, and more.

Philanthropy needs to commit for the long haul — multi-year, maybe decade-long — and deploy capital in a way that’s more comprehensive, ambitious, and technology-neutral, aimed at the systemic policy barriers standing in the way of commercialization. Impact investors with philanthropic dollars can also do something private capital can’t: fund without chasing market returns. 

And private finance needs a real appetite for FOAK risk, not just an appetite for scaling data centers and AI. These three sectors may never move in formal coordination, but greater collaboration can ensure that each is comfortable supporting the others by taking on the risks best suited to its role. Each has to play its part in this pattern if we’re going to bring clean firm technologies to market, deploy them at scale, and reduce the green premium.

That’s what we’re building at CleanEcon, and it’s what we’re focused on heading into Climate Week NYC . The answer isn’t just more capital in any one pool, or asking one pool to do more — it’s an explicit approach for collaborating and allocating the risk tranches of clean firm projects to the capital that’s mandated to hold them. If you’re a donor, financier, or policy wonk thinking about this problem too, we’d like to hear from you.