Investing in the Ecosystem: Q&A with EastX Ventures

1 April 2026

Earlier this week we spoke with EastX Ventures about their Starmaker One fund which, with a cornerstone investment from the UK government, the fund is targeting fusion’s picks and its shovels, both the supply-chain and enabling technologies. We explored their investment mandate, portfolio construction, the unique “deeptech Trojan horse” nature of fusion, and why they believe capital formation is just as critical as design purity in the race to commercialize fusion power.

FusionX: With the UK government as a cornerstone £20 million investor in Starmaker One, how does this public-private partnership shape your investment mandate?

EastX: Having UKAEA as our anchor LP is genuinely transformative. They bring unparalleled technical credibility, deep sourcing relationships, and decades of institutional knowledge about what the supply chain actually needs to build. Their involvement reinforces our thesis: they want to see a commercially vibrant UK fusion ecosystem, and so do we. The fund is 75% UK-allocated, reflecting both the quality of opportunity here and the alignment with our anchor LP’s mission. The remaining 25% gives us flexibility to follow exceptional companies globally, where companies like Focused Energy and Proxima Fusion have demonstrated that the continent is producing world-class fusion science. We’re not trying to be too spread out in our first vehicle. Starmaker One is about establishing the playbook.

FusionX: : Given the strong concentration of fusion opportunities in the UK, do you see this as a risk to your investment strategy?

EastX: We see it as focus, not risk. The UK has Culham, UKAEA, a regulatory environment actively building a pathway to commercial fusion, and a talent pipeline flowing from top physics and engineering departments. The density of opportunity here is extraordinary. Concentration risk is a concern when you’re concentrating in weakness. We’re concentrating in strength.

FusionX: You target a portfolio of ~25 investments, balancing supply-chain companies and spinouts. How do you manage the risk profiles between these categories in an early-stage fund?

EastX: We target ~25 investments across three categories: fusion supply chain companies, systems companies, and spinouts from research institutions. Supply chain and spinout plays tend to have nearer-term revenue visibility because they sell into existing markets today. Systems carry more technical risk but potentially higher upside if the fusion timeline accelerates. The key insight is that supply chain and spinout companies don’t need fusion to succeed to generate returns. That asymmetry makes the portfolio construction work.

FusionX: What is your typical investment size, and do you have a preference for SAFEs or priced equity rounds?

EastX: We typically write initial cheques in the £3 million range, with some reserves set aside for follow-on. We lean toward priced rounds when the company’s stage and technical maturity justify it, as we prefer the governance clarity. SAFEs and convertibles are fine for very early-stage spinouts where valuation discovery is genuinely difficult. We prefer to take board or observer seats but can be in the back seat as well in some cases; in a sector this technical, being close to the company matters.

FusionX: How do you handle reserves for follow-on investments?

EastX: We reserve 25% of fund capital for follow-on, which is deliberately lean. Our philosophy is to maximise ownership upfront rather than hold back large reserves waiting for proof points that push valuations higher. There are genuinely two schools of thought on this in deep tech. The traditional view is to keep 40-50% in reserve, follow your winners hard, and protect pro-rata at all costs. The counter-argument, which we find more compelling at our stage and fund size, is that your best entry price and ownership percentage is almost always at the initial investment, so deploying conviction early is the more capital-efficient strategy

What makes this work for us is that we leverage our investors network of larger funds for current and future funding rounds of portfolio companies. We also run an active co-investment programme with our LPs, which means that when our portfolio companies raise their next round, we can bring additional capital to the table through that channel without drawing from the fund’s reserves. The result is that our portfolio companies get the follow-on support they need, our LPs get direct deal access they value, and we preserve our fund economics without over-reserving.

FusionX: Are you seeing early signs of M&A activity in the fusion supply chain, or is that a thesis for the 2030s?

EastX: Completed supply chain M&A in fusion specifically is still rare, the sector is too young for that. But the honest answer is that we don’t need completed deals to validate the thesis; we need precursor signals, and those are clearly present. Strategic investors like Mitsui, Sumitomo, and Chevron are writing cheques into fusion programmes not purely as financial investments but to establish proximity to the supply chain. The Proxima-RWE-Bavaria MoU announced at FusionX in Munich is another example of large industrials that are positioning themselves now, and strategic investment typically precedes acquisition by three to five years. That’s the pattern we saw in batteries, in offshore wind, in advanced semiconductors.

The key message is this: supply chain consolidation doesn’t wait for the reactor to work; smart strategic acquirers move when the technology is de-risked enough to be credible but early enough that valuations are still reasonable. We are in that window now. Our portfolio companies won’t need to wait for a fusion plant to switch on to achieve a significant exit. We think they’ll be acquired by  the industrials who need to control the supply chain before that moment arrives. That’s the structural exit thesis, and it holds regardless of which reactor design ultimately wins.

FusionX: You’ve described fusion as the ultimate “deeptech Trojan horse.” How do you evaluate a startup’s potential to benefit both fusion and adjacent markets?

EastX: Fusion is genuinely unique as an investment thesis because it creates demand pull across the entire frontier of deep technology. A company building advanced plasma diagnostics is also building AI inference systems for real-time sensor data; a company solving tritium handling is also solving robotics for extreme environments. But here’s the critical point: these companies don’t need to wait for fusion to pay the bills. The best companies in our pipeline are already generating revenue in large, established markets today: semiconductors, aerospace, defence, and advanced manufacturing. Fusion is the long-term demand signal that justifies building the technology to its full potential; the adjacent markets are what fund the journey. We explicitly ask: where does this technology win outside of fusion, and how big is that market? If the answer is weak, the investment case is much harder to make. If the answer is strong, we have a business that can thrive on its own terms and deliver extraordinary upside if and when fusion scales.

FusionX: You highlighted that fusion supply-chain players already generate revenue in unrelated multi-billion-dollar markets. What are the most lucrative adjacent markets portfolio companies are penetrating today and how important are these adjacent markets to you?

EastX: Some of the most compelling companies we speak to are generating real revenue in semiconductors, defence, life sciences, aerospace, and advanced manufacturing. Precision engineering for fusion components turns out to be precision engineering for satellite propulsion or medical devices too. This is critical to our LP narrative because it means we’re not asking anyone to wait 15 years for a liquidity event. The adjacent market revenues de-risk the fusion timeline entirely. It hedges the downside, while keeping the upside open.

FusionX: How do you convince traditional LPs to value this broader ecosystem compared to the “holy grail” of fusion power?

EastX: The single most important reframe I make is this: if you invest in fusion supply chain companies with strong adjacent market revenues, the question of which reactor design wins becomes commercially irrelevant to your returns. You’re not betting on tokamaks versus stellarators versus inertial confinement. You’re betting on the companies building the enabling infrastructure that every design needs. That’s a fundamentally different risk profile, and once LPs internalize it, the conversation changes completely.

FusionX: How does the history of fission shape your evaluation of approaches and founding teams in fusion today?

EastX: The history of fission is humbling for anyone who believes the best technology wins on its merits. Light water reactors became the global standard not because they were the most elegant design – gas-cooled and molten salt designs had real advocates – but because they had the strongest backing from the US Navy and the industrial base to scale. The lesson for fusion is clear: execution, capital discipline, and the ability to build coalitions of institutional support matter at least as much as the physics. We weight founding team quality and capital-raising acumen very heavily in our diligence.

FusionX: If capital formation decides success, do you favour pragmatic, easily-funded approaches over elegant but capital-intensive novel designs?

EastX::  We don’t dismiss technically superior approaches, simply because they’re harder to fund. What we do is apply a harsh lens on path-to-capital. A beautiful design that requires $10 billion before it generates a single data point is a different investment case than a more pragmatic design with a $50 million proof-of-concept milestone. We want founders who understand that capital formation is itself a core competency, not an afterthought.

FusionX: How do you evaluate companies’ prospects to attract growth capital in a tougher macroeconomic environment?

EastX: This is the central challenge for the sector and it’s worth being honest about it. If the macro environment deteriorates significantly, pure-play reactor developers are the most exposed – their capital requirements are enormous and their revenue visibility is distant. That’s not where we play. The structural advantage of our portfolio is that we’ve deliberately constructed it around companies with multiple layers of resilience: our supply chain companies have real revenues in existing markets today, and our systems companies are built around durable funding structures, national champions with long-term government-backed procurement contracts that don’t disappear in a downturn, companies with broad IP portfolios they can monetise across adjacent industries regardless of fusion’s timeline, and capital-light businesses pursuing licensing models and utility partnerships rather than building expensive physical infrastructure themselves. These are companies designed to survive funding winters, not companies that require perpetual tailwinds to stay alive.

FusionX: What does your diligence process look like for early-stage fusion deals?

EastX: Early-stage deep tech diligence is fundamentally different from software. You’re underwriting physics, people, and market structure simultaneously, and the order in which you stress-test those 3 things matters.

We typically start with the science, we bring in domain experts to pressure-test the core claims and the IP landscape carefully, and ask whether the approach is defensible or whether it relies on a single insight that a well-funded competitor could replicate. In fusion specifically, extraordinary claims require extraordinary evidence, and we’ve walked away from compelling stories that couldn’t survive that scrutiny.

From there we go deep on the team. Not just credentials but pattern of behaviour. Have they raised capital before in difficult environments? Have they shipped hardware and managed teams outside academia? The transition from researcher to founder is genuinely difficult and we want evidence that someone has made it, not just declared it.

Then we examine the commercial architecture. Can this company generate meaningful revenue before fusion matures as a market? What are the adjacent industries it served today, how large are they, and how competitively positioned is the company within them? We also look hard at supply chain positioning: does this company occupy a genuine bottleneck, and does that bottleneck get more valuable as the fusion programmes scale?

Finally we look at ecosystem validation: not just whether credible institutions endorse the technical approach, but whether the company is genuinely embedded in the fusion ecosystem in ways that give it sourcing advantages, early customer relationships, and ongoing access to the best science as it emerges. That’s a harder thing to fake than a reference letter.

FusionX: What is the most critical pinch-point in the global fusion supply chain?

EastX: High-temperature superconducting (HTS) tape. The entire stellarator and most advanced tokamak programmes depend on HTS magnets, and the global production capacity for tape is nowhere near sufficient for commercial deployment at scale. It’s a genuine pinch-point and it’s one where investment now could create extraordinary pricing power and strategic position by the time the machines need it. We think about it as a category where the right company, built correctly today, could be indispensable to the global fusion industry within a decade.

Tritium production is the deeper, longer-term constraint: the global inventory is tiny, breeding blanket technology remains unproven at scale, and no private capital solution has clearly emerged yet. It’s a bottleneck we watch carefully, but the investment pathway there is less developed than in superconducting materials.

FusionX: By 2030, what single milestone must fusion achieve to shift from strategic proposition to commercial reality?

EastX: By 2030, the milestone that shifts the narrative is a private company demonstrating sustained net energy gain with a credible path to cost-competitive generation – not a government programme, not a one-off pulse, but a private company with a repeatable result and a roadmap to commercialisation. That would trigger a wave of infrastructure capital into the sector that would dwarf everything we’ve seen so far. Our positioning is designed for exactly that inflection: a portfolio of supply chain and systems companies that become the essential vendors to every programme that scales from that point forward.