Sequoia's $6bn bet on a court decision

NuScale, a reactor company in Corvallis, Oregon, spent the better part of a decade and hundreds of millions of dollars to secure the only small modular reactor design the Nuclear Regulatory Commission has approved. The public market values that achievement at about $3 billion. On Monday, Sequoia Capital led a $1 billion round that valued Valar Atomics, a three-year-old startup with no approved design and an active lawsuit against the NRC, at $6 billion. Twice the price, for the company that skipped the line.

The round triples the roughly $2 billion mark Valar carried five months ago. Atreides Management, Point72 and Snowpoint Ventures came in alongside Sequoia, there is a $200 million credit facility behind it, and Shaun Maguire, the Sequoia partner whose portfolio runs to defense and hard tech, takes a board seat. What the money buys today is modest: Valar is pre-revenue in any commercial sense, one of four companies to reach criticality this year, which it did under the Department of Energy's reactor pilot program, the executive-branch fast-track that lets advanced reactors demonstrate under DOE authority and skip the NRC entirely. In July it drew enough power from the reaction to run a single Nvidia chip and host a website.

Isaiah Taylor, Valar's 27-year-old chief executive and a high-school dropout whose great-grandfather worked the Manhattan Project, says the check is for manufacturing pace: one reactor a year, then one every six months, then one a month. The photograph that ran with the announcement showed one of his microreactors lashed to the deck of a C-17 at a California air reserve base, which is the correct picture for what Sequoia is actually underwriting.

The demand behind all of this is real, and it is priced into every name in the sector. The harder question is what the extra turns are paying for, because on the one credential the industry spent a decade treating as decisive, an approved design, Valar has nothing.