May 12 (Reuters) - Geothermal energy developer Fervo Energy said on Tuesday it has raised $1.89 billion in its upsized U.S. initial public offering, highlighting robust investor appetite for the listing.
The Houston-based company sold 70 million shares at $27 apiece, securing a valuation of roughly $7.66 billion. The price range was lifted earlier this week to $25 to $26 per share from $21 to $24.
Surging demand from data centers supporting artificial intelligence tasks, coupled with rapid electrification
across transportation, housing and other industries, is tightening U.S. power supply, driving up electricity prices and boosting the need for reliable energy.
Fervo develops advanced geothermal systems that generate round-the-clock, carbon-free electricity, offering a dependable alternative to weather-reliant solar and wind power.
It is one of the three companies seeking to price billion-dollar IPOs this week, along with AI chipmaker Cerebras Systems and Blackstone Digital Infrastructure Trust.
J.P. Morgan, BofA Securities, RBC Capital Markets and Barclays were the joint lead book-running managers for the Fervo Energy offering. The company aims to list on the Nasdaq under the symbol "FRVO" on Wednesday.
Fervo uses enhanced geothermal systems, or EGS, technology to address the scalability barriers 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.
The IPO comes at a time when Middle East tensions have pushed crude prices above $100 a barrel, boosting the appeal of U.S. energy assets.
Geothermal energy has also benefited from a more favorable regulatory stance under U.S. President Donald Trump than other renewables, even as he reversed Joe Biden-era policies aimed at shifting the world's largest economy away from fossil fuels.
(Reporting by Pragyan Kalita and Disha Mishra in Bengaluru; Editing by Shilpi Majumdar and Subhranshu Sahu)
