An Austin startup is hoping to become part of a growing wave of high-tech companies developing and deploying small-scale nuclear reactors that could help power everything from data centers to cities.
Aalo Atomics, legally known as Aalo Holdings Inc., has raised $27 million to help it develop and manufacture small nuclear reactors at its headquarters and manufacturing facility in Southeast Austin.
The startup, founded last year, said this month that it is opening a 40,000-square-foot facility located roughly halfway between downtown and the airport at 5900 E. Ben White Blvd. with its new funding.
Aalo had been working out of a WeWork space on Congress Avenue, but it has since moved into its new space where it will develop its experimental non-nuclear test reactor, the Aalo-X. For now, the company is developing its prototypes without any nuclear fuel.
But, eventually, the startup plans to build the components for its first product, the Aalo-1. From there, the microreactors could be shipped out in regular semi-trucks and assembled on customer sites and then begin producing power. The company expects to be able to produce dozens of reactors there each year.
Its primary goal is to produce electricity at three cents per kilowatt hour. Texas average electricity rates currently range from 10.4 cents to 21.9 cents per kilowatt hour, according to research by MarketWatch.
Aalo was co-founded by CEO Matt Loszak and CTO Yasir Arafat. Loszak previously co-founded human resources software company Humi and music-focused social media app JamCam Inc. Arafat, meanwhile, was previously the chief designer and project lead of the MARVEL nuclear project at Idaho National Laboratory. Before that, he was principal engineer on the eVinci micro reactor at Westinghouse Electric Co.
The MARVEL concept developed at Idaho National Labs is a small microreactor that can power up to 10 homes, and it helped inspire the creation of Aalo.
Aalo submitted a regulatory engagement plan with the U.S. Nuclear Regulatory Commission for the planned Idaho Nuclear Project in July. It proposed a plant with seven Aalo-1 microreactors to be operational by 2029.
The Aalo-1 reactors use sodium as a coolant instead of water because it transfers heat effectively. It also uses uranium zirconium hydride, a measure that helps improve safety because it helps stabilize the reactor under many circumstances and allows it to easily be shut down.
"This is the same exact fuel we utilize in university research reactors, so we have a lot of data on it," Arafat said in a company video. "And this fuel is inherently very safe, meaning if you add reactivity to the fuel, it tries to heat up but within a fraction of a second it shuts down the reactor."
Aalo picked Austin for its headquarters and production because of tech-friendly regulations, as well as proximity to Texas' primary energy grid, ERCOT, which could use such nuclear microreactors as part of the broader Texas Nuclear Working Group.
"The factory line is a product in itself, and it underscores our focus on factory manufacturability from day 1," Loszak wrote in a recent blog post. "Aalo-1 is designed to be simple to manufacture, easy to transport and produce electricity affordably. In the long term, we want nuclear energy to be accessible to everyone, not just the developed nations."
Aalo previously raised an almost $6.3 million seed round. Its new $27 million investment comes from backers including 50Y, Valor Equity Partners, Harpoon Ventures, Crosscut, SNR, Alumni Ventures, Preston Werner, Earth Venture, Garage Capital, Wayfinder, Jeff Dean and Nucleation Capital.
The company has 15 employees now, and it plans to double its size with new roles in manufacturing, sales, engineering, finance and product, with help of the new investment.
Aalo's funding and manufacturing come as many energy groups and startups across the globe are working to develop smaller, safer nuclear energy projects to power a growing demand for power for everything from artificial intelligence computing and data centers, as well as more traditional energy use by businesses, homes and industry.
This new wave of innovation comes after decades of setbacks, which have included nuclear plant shutdowns and accidents. Loszak said the Idaho National Laboratory projects and companies like his represent the precipice of a second atomic age.
"We're commercializing a scaled-up reactor, inspired by MARVEL," he said in a video explaining the company's technology.
