Startups

X-energy landed one of the DMV’s biggest 2023 raises

The addition to its Series C was announced just over a month after the company scrapped plans for a SPAC merger.

X-energy's TRISO-X, a fuel particle for nuclear reactors. (Courtesy X-energy)

The steady march toward the end of 2023 apparently doesn’t mean companies are done posting raises, let alone massive ones. Case in point: The Washington Business Journal (WBJ) reported on Monday that Rockville, Maryland-based nuclear energy company X-Energy Reactor Co., aka X-energy, nabbed another $80 million for a Series C that now totals $235 million. An announcement noted that this Series C amount included “anticipated conversions of certain of the Company’s outstanding convertible notes.”

WBJ noted that this raise makes the full round among the region’s largest this year. By comparison, the only DC-area raise that exceeded this one last quarter was Mapbox’s $280 million late-stage Series E round.

X-energy’s non-SPAC

Of course, both this WBJ article and our prior coverage of PitchBook’s largest reported DMV raises noted that VC funding in 2023 hasn’t been as strong as in years past. It’s worth noting that this latest investment came from Ares Management Corp., the firm that planned to take the company public via a SPAC merger with one of its subsidiaries until last month, and X-energy Executive Chairman Kam Ghaffarian.

X-energy Corporate Communications Director Robert McEntyre told Technical.ly via email on Tuesday that the company, which designs nuclear reactors and tech to power them, has about 400 employees. He added that X-energy intends to use the Series C funds to keep developing its core technology, including the Xe-100 reactor and TRISO-X nuclear fuel.

McEntyre also said the company terminated the SPAC deal plans because of the current economic climate.

“Given challenging market conditions, peer-company trading performance and a balancing of the benefits and drawbacks of becoming a publicly traded company under current circumstances, X-energy and [Ares Acquisition Corp., Ares Management’s special affiliate for the deal] jointly determined that it was the best course of action at this time not to proceed with the previously announced SPAC transaction,” McEntyre said.

Clarity Innovations raised, too

In other recent local investment news, WBJ also recently reported that government and defense services-focused K Street private equity firm Capitol Meridian Partners invested an undisclosed amount in Columbia, Maryland’s Clarity Innovations. The 120-employee company provides cloud, analytics and other tech services to national security agencies. Capital Meridian Partner Mike Gozycki, who joined Clarity Innovations’ board as part of the deal, said the company’s defense focus made the investment attractive.

“It sells into the national security community which is a core end market for us,” he told WBJ.

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Do VC and private equity investments like these represent some kind of trend? Will the end of 2023 bring more news of late-in-year raises — especially ones as big as the one for X-energy? We’ll be keeping an eye out.

A version of this story first appeared in Technical.ly’s DC newsletter. Sign up to get more stories like this in your inbox before they go online.

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