Mazama Energy raises $135M for super-hot-rock geothermal

Geothermal startup Mazama Energy raised $135 million in an oversubscribed Series B round, the company said Thursday. The fresh funding will help Mazama develop horizontal wells in super-hot rock capable of generating 15 megawatts of electricity per well.

Mazama plans to start generating electricity sometime next year, and says its first site in Oregon is capable of producing 10 gigawatts of electricity — a sharp upward revision from the company’s estimate last year, when investor Vinod Khosla said the site had the potential to produce 5 gigawatts.

Enhanced geothermal startups are emerging as a significant contender in the effort to power AI data centers and other large loads on the grid. While tech companies and data-center developers have largely backed natural gas, geothermal startups have been quickly advancing their technology. Unlike earlier geothermal projects, enhanced-geothermal startups like Mazama target deeper and hotter rock: the company has drilled past 10,000 feet in 15 days on its way to about 15,000 feet deep. At those depths, Mazama can access 750°F (400°C) heat, which at high pressures turns water into a “supercritical” fluid — neither fully liquid nor fully gas — that can absorb far more energy than ordinary steam. Mazama says that will let each well produce up to 10 times more power than traditional geothermal technology.

The potential payoff is significant given the depths Mazama is targeting: tapping just 1% of super-hot rock worldwide could generate more than 63 terawatts of electricity, according to the University of Twente and the Clean Air Task Force. Work at the Oregon site is still in its early stages, but the startup has already secured land for a second development. Mazama aims to complete development of the first site by 2030, at which point it says it should generate 200 megawatts of electricity.

The new round was led by Centaurus Capital and Doerr Capital, with participation from ConocoPhillips and Shell Ventures. Existing investors Khosla Ventures and Gates Frontier returned, and new investors SiteGround Capital, H. Barton Asset Management, and the Jeffrey and Marieke Rothschild Foundation also joined. Mazama was incubated at Khosla Ventures.

Why it matters

Enhanced-geothermal startups like Mazama are positioning super-hot-rock drilling as an alternative to natural gas for powering AI data centers and other large loads on the grid.