Fervo Energy, a geothermal startup, is reportedly eyeing an initial public offering (IPO) in the next two years, driven by growing concerns over power demand growth from data centers. According to CEO Tim Latimer, the company is considering an IPO due to the "huge hunger" in the public markets to address the power demand story, which is expected to double by 2029.

The startup's consideration of an IPO comes on the heels of its recent fundraising success, having raised $244 million in February 2024 and another $255 million in December. The latter round was split roughly evenly between equity and debt, according to a source close to Fervo. This fundraising success has put the company in an "awesome spot" right now, the source said.

Fervo has been making steady progress on commercializing its approach to geothermal power, which uses directional drilling techniques developed by oil and gas companies to tap resources over a wide area. Each well is then laced with sensors and fiber optic cables, allowing the company to monitor its performance over time. The startup has been working to bring down drilling costs, having successfully drilled a horizontal well in 21 days last year, 70% less time than it took for its first well. Latimer has also announced that Fervo is targeting a 50% cost reduction on projects this year.

Fervo is currently working with Google on a first-of-its-kind geothermal power plant, known as Project Red, which can supply up to 3.5 megawatts of electricity to the Nevada grid. This project is significant, as it helps to offset Google data centers' power use in the state. The growing concern over power demand growth from data centers is a key driver behind Fervo's consideration of an IPO, as companies like Google and others seek to reduce their carbon footprint.

Interestingly, Fervo and other advanced geothermal startups are thought to be a somewhat safer play during the current Trump administration, given their similarities to oil and gas companies. This is evident in the investment made by Secretary of Energy Chris Wright, who oversaw an investment into Fervo while he was CEO of Liberty Energy, an oilfield services company that participated in a $138 million round in 2022.

While an IPO is unlikely to be imminent, Fervo's consideration of going public is a significant development in the renewable energy space. As the company continues to make progress on commercializing its geothermal power approach, it will be interesting to see how the public markets respond to its growth story. With the growing concern over power demand growth from data centers, Fervo's IPO could be a bellwether for the industry's ability to address this critical issue.

In conclusion, Fervo Energy's consideration of an IPO is a significant development in the renewable energy space, driven by growing concerns over power demand growth from data centers. As the company continues to make progress on commercializing its geothermal power approach, it will be interesting to see how the public markets respond to its growth story. With the industry's focus on reducing carbon emissions, Fervo's IPO could be a key milestone in the transition to a more sustainable energy future.