A startup building compact nuclear reactors for the U.S. military has secured one of the largest funding rounds yet in the advanced nuclear space, adding fresh momentum to a sector riding a wave of investor enthusiasm tied to soaring electricity demand.

The company confirmed this week that it closed a Series C round backed by a mix of venture firms, blending traditional equity investment with a sizable debt component. The raise reflects a broader surge of capital flowing into next-generation nuclear ventures as data centers and electrification push power demand to new highs.

The startup's reactor design is built to generate anywhere from 100 kilowatts up to a full megawatt — enough to keep the lights on for hundreds of homes — using TRISO fuel, a technology that wraps uranium in layers of carbon and ceramic. That casing is designed to keep the fuel intact even under the extreme heat found inside typical reactor cores, an approach several rival startups have also adopted as a safer alternative to conventional fuel rods.

Earlier this year, the company's demonstration unit achieved criticality at a federal research laboratory, a key technical milestone on the path toward commercial deployment. It's now one of three companies still competing for a Pentagon program aimed at testing small reactors at Air Force installations in two western states.

The company is targeting next year to bring its first power-generating reactor online, with actual deployments at military sites penciled in for 2028. Executives haven't disclosed pricing for the technology, but the choice to court a military customer — an entity long known for tolerating higher costs than commercial buyers — lines up with the economic realities facing the sector.

Cost estimates from independent energy analysts suggest that early small modular reactors, expected to enter service in the early 2030s, will likely run more expensive than nearly every conventional power source aside from the priciest gas turbines. That pricing gap helps explain why so many companies in this space are chasing government and defense contracts rather than competing head-on in commercial power markets right away.

Even so, capital keeps pouring in. Rising electricity demand from artificial intelligence infrastructure and the broader shift toward electrification has made nuclear fission newly attractive to investors who had largely stayed on the sidelines for decades, setting up a wave of competition among startups racing to prove their reactors can eventually scale.