Fervo Energy eyes US$6.5 billion valuation in U.S. IPO

A drill rig stands at a Fervo Energy geothermal site near Milford, Utah. (AP Photo/Ellen Schmidt)

Fervo Energy said on Monday it was targeting a valuation of up to US$6.5 billion in its initial public offering in the United States, as it looks to tap renewed investor interest in the energy sector amid the rapid growth in AI data centers.

The Houston-based energy developer also said it seeks to raise up to US$1.3 billion in the IPO by offering 55.6 million shares priced between US$21 and US$24 apiece.

Beyond booming demand from AI data centers, the growth of electric vehicles and domestic manufacturing in the U.S. is driving up electricity consumption, underscoring the need for reliable power.

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Fervo Energy develops advanced geothermal systems that generate round-the-clock, carbon-free electricity, offering a dependable alternative to weather-reliant solar and wind power.

The company uses enhanced geothermal systems, or EGS technology, to address the scalability limits of traditional geothermal energy - which relies on rare conditions such as volcanic activity - and deploys subsurface monitoring tools including AI-enhanced fiber optic sensing.

It is also building its flagship Cape Station project in Utah, which is expected to be the world’s largest next-generation geothermal project and start delivering power later this year.

In its last funding round in December, the company raised $462 million at an undisclosed valuation, led by new investor B Capital, a venture capital firm led by Facebook co-founder Eduardo Saverin.

Cornerstone investors, including Atlas Point Energy Infrastructure Fund, Norges Bank Investment Management, Wellington Management and Capital Research, have indicated interest in buying up to US$350 million of shares in the IPO.

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J.P. Morgan, ⁠BofA Securities, ​RBC Capital Markets and Barclays are the ​joint lead book-running managers.

Fervo intends to list on the Nasdaq under the symbol “FRVO.”

(Reporting by ‌Pragyan Kalita ‌in Bengaluru; ​Editing by Diti Pujara)