TerraPower Stock and IPO: Can You Invest in the Bill Gates-backed Nuclear Startup?

Bill Gates-backed TerraPower is a nuclear design and engineering company working on smaller, modular nuclear reactors. Will it succeed in developing a carbon-free source of energy that is both safe and affordable? And is there a way for you to invest in Terrapower stock or similar companies? Keep reading to learn more.

Matt Johnston   Updated April 14th, 2022

Credit: TerraPower

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What is TerraPower?

TerraPower is a startup developing small, modular nuclear reactors to provide a future source of safe, low-cost, and abundant clean energy. It is also developing technologies for cancer treatment and reactor design software.

TerraPower’s origins

TerraPower traces its origins to 2006. Bill Gates and a few others formed a group to brainstorm solutions to some of the most pressing challenges facing the world today. Top among their concerns were climate change, the growing need for electricity, and reducing global poverty. Nuclear energy, they concluded, would be a crucial part of any solution to these problems.

TerraPower officially launched in 2008. It immediately began working on the design of its Traveling Wave Reactor (TWR) technology. The novelty of the TWR design is that it allows for the use of unenriched uranium as fuel. Current nuclear reactors use enriched natural or depleted uranium as fuel. Reactors based on the design will also be capable of running for up to 100 years without refueling.

This innovation could extend the domestic uranium reserves of the U.S. by hundreds of years. Not needing enrichment and reprocessing facilities lessens the risk of weapons proliferation. TerraPower’s TWR design is thus more efficient than conventional nuclear reactors. It also eases some of the concerns over nuclear proliferation.

Throughout the early 2010s, TerraPower began collaborating with other national laboratories and universities. In 2012, the company established a laboratory of its own. It then expanded that laboratory into a 10,000 square-foot research and development facility three years later.

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In 2015, TerraPower received a grant from the U.S. Department of Energy (DOE). It was for the research, design, and testing of its molten chloride fast reactor (MCFR) project. The MCFR design enables reactors to operate at higher temperatures than conventional reactors. That makes them more efficient at producing carbon-free electricity. It is also considered safer than conventional reactors.

TerraPower is partnering with Southern Company to develop an MCFR; testing is expected in 2022. The tests will provide data on the technology’s ability to scale to a commercially viable size. TerraPower is also developing technology for a sodium-cooled fast reactor—the Natrium reactor. The reactor will have a baseload output of 345 megawatts but can ramp up to produce 500 megawatts during peak demand. It is also safer and more cost-effective than conventional reactors.

The DOE awarded TerraPower a grant to demonstrate its Natirum reactor and integrated energy system in 2020. The company is working with PacifiCorp to build the reactor at a retiring coal plant in Wyoming by 2028. It will be the company’s first-ever demonstration nuclear power plant.

How TerraPower stands out from the crowd

TerraPower is focused on using nuclear science to produce carbon-free energy that is both safe and affordable. As an emissions-free source of energy, nuclear checks one of those boxes. Yet, nuclear’s ability to be a safe and low-cost form of energy is much more questionable. There is a reason why many environmental, social, and governance (ESG) funds exclude nuclear energy companies.

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Nuclear disasters in Chernobyl and, more recently, Fukushima have tainted nuclear’s safety record. Many nations are reducing their number of nuclear power plants following the 2011 Fukushima disaster, though some are changing their minds after the war in Ukraine started. Nuclear waste and the fear of weapons proliferation are two other reasons why nuclear is viewed as an unsafe source of energy.

TerraPower wants to develop nuclear technology to ease those (very real) concerns. Its TWR technology uses a system that is inherently safer than current reactors. The design also produces about 80% less nuclear waste than conventional light water reactors. Proliferation risks are also reduced, as noted above.

Then there is the issue of cost. The levelized cost of energy (LCOE) for conventional nuclear reactors is higher than almost all other forms of energy. LCOE is a measure of the present value of the total of cost building and operating a power plant over its expected lifetime.

But newer, so-called “modular” nuclear reactors may be a solution to the high cost of large conventional reactors. These smaller, simpler designs are easier to integrate with a grid using intermittent renewables, such as wind and solar.

TerraPower’s Natrium reactor could boost power output during peak demand. Nuclear could be a good complement to renewables and solar, supplementing them when the wind isn’t blowing and the sun isn’t shining. Advocates of modular reactor designs estimate that the cost and build time could be cut in half compared to today’s traditional reactors.

Is TerraPower too good to be true?

Its promise aside, TerraPower is a startup working on a concept. It needs to surmount technical challenges and show that its designs actually perform as expected.

Is TerraPower publicly traded?

TerraPower is a private company. As such, it does not have shares that are publicly traded on an exchange. The company has not disclosed any plans of going public yet, and an IPO may be far off. The stock market generally prefers to see companies that are generating revenues, if not profits.

Who owns TerraPower?

Aside from Bill Gates, TerraPower has also received investments from the former CTO of Microsoft Nathan Myhrvold, India-based Reliance Industries, and venture capital firms Charles River Ventures (CRV), Khosla Ventures, and Intellectual Ventures.

Besides getting capital from Bill Gates and venture capital firms, TerraPower has received funds from the Department of Energy (DOE), which has given TerraPower over $100 million in grants. In 2016, the DOE awarded the company $40 million for its MCFR project. Four years later, TerraPower received another $80 million from the DOE for its Natrium reactor and integrated energy system.

How to buy TerraPower stock

TerraPower does not have common shares that you can trade on an exchange, but that doesn’t mean there is no way to invest. In fact, you can buy shares in TerraPower through a pre-IPO investing platform.

Two pre-IPO platforms, EquityZen and Forge (formerly Sharespost), let investors buy shares from an employee or investor in a private company. Of course, you should always bear in mind that employees and early investors know more than you do, and private companies don’t have the disclosure requirements of publicly traded companies.

Shares of TerraPower are currently only available on EquityZen, though you have to be an accredited investor to buy those shares. An accredited investor is someone who meets at least one of the following conditions:

  • Has earned income over $200,000 in each of the past two years (or $300,000 with a spouse) and expects the same this year
  • Has a net worth of more than $1 million (alone or with a spouse), excluding their primary residence
  • Holds one of three special licenses issued by the Financial Industry Regulatory Authority (FINRA)

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TerraPower stock alternatives

If you want to invest in nuclear energy but are not an accredited investor or you don’t want the risk of early-stage startups, you have other options.

One way to gain exposure to nuclear energy is through investing in an ETF comprised of uranium mining stocks. That’s because uranium is the most widely-used fuel by today’s nuclear power plants.

Four of the top uranium ETFs for making a play on nuclear energy include:

  • Global X Uranium ETF (URA)
  • North Shore Global Uranium Mining ETF (URNM)
  • VanEck Uranium+Nuclear Energy ETF (NLR)
  • Sprott Physical Uranium Trust (U.U)

🔔 Learn more about investing in nuclear energy stocks and ETFs.

NOT INVESTMENT ADVICE. The content is for informational purposes only; you should not construe any such information as investment advice.

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