Fervo Energy Targets $1.33 Billion US IPO Amid Data Center Boom

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Fervo Energy Targets $1.33 Billion US IPO Amid Data Center Boom

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Fervo Energy a Houston-headquartered startup specializing in next-generation geothermal power, has filed for a US initial public offering to tap into surging electricity demand driven by data centers. The company seeks to raise as much as $1.33 billion by offering 55.56 million shares at $21 to $24 apiece, which could value the firm at $6.5 billion fully diluted, based on details in its SEC filing submitted Monday.

Geothermal energy harnesses heat from the Earth’s subsurface to generate reliable, baseload electricity, positioning it as a clean alternative to fossil fuels. Fervo has pioneered enhanced geothermal systems (EGS), which drill deeper and use advanced fracturing techniques similar to those in oil and gas, to access hotter rock formations. This approach aims to scale up geothermal beyond traditional hydrothermal sites, potentially unlocking vast untapped resources in the US.

The IPO timing aligns with explosive growth in AI and cloud computing, where hyperscale data centers from companies like Google, Microsoft, and Amazon require massive, round-the-clock power. US data center electricity consumption is projected to double or triple by 2030, per estimates from the Electric Power Research Institute, straining grids and boosting interest in firm power sources like geothermal. Fervo has already secured high-profile backing, including from Google, which signed a 320-megawatt deal in 2023—the largest corporate geothermal purchase to date—and tech investors like Devon Energy and Ontario Power Generation.

While geothermal represents less than 1% of US electricity today, with about 3.7 gigawatts online mostly in the West, federal incentives from the 2022 Inflation Reduction Act offer tax credits up to $35 per megawatt-hour. Fervo’s projects, including pilots in Nevada and Utah, target commercial operations by 2028. The IPO underscores a broader rush among clean energy developers to go public, following successes like Bloom Energy and amid $1 trillion in planned data center investments through 2030.

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