Geothermal energy startup Mazama Energy has raised $135 million in a Series B funding round that was oversubscribed, the company announced on Thursday. This investment will support the development of horizontal wells in super-hot underground rock formations, which have the potential to generate up to 15 megawatts of electricity per well. Mazama plans to begin producing electricity sometime next year and has revised its estimates for its first site in Oregon upward significantly. Previously, the site was thought to generate 5 gigawatts, but the company now estimates it could produce 10 gigawatts — a substantial increase. Enhanced geothermal systems are emerging as a key solution for powering high-energy needs like AI data centers, which require a stable and large electricity supply. While some tech companies have turned to natural gas for their energy needs, geothermal startups like Mazama are making rapid technological progress. Unlike older geothermal projects that targeted shallower, less hot rock, enhanced geothermal systems are aiming deeper — often more than 10,000 feet below the surface. At these depths, temperatures can reach as high as 750°F (400°C), where water turns into a "supercritical" fluid. This state, which is neither fully liquid nor gas, allows for more efficient energy absorption than traditional steam, enabling each well to produce up to 10 times more power than conventional geothermal systems. The potential of this technology is vast. According to research from the University of Twente and the Clean Air Task Force, tapping just 1% of the world’s super-hot rock formations could generate over 63 terawatts of electricity — enough to power millions of homes. Although Mazama’s Oregon project is still in the early stages, the company has already acquired land for a second development site. It aims to complete the first site by 2030, which it estimates will generate 200 megawatts of electricity — enough to power tens of thousands of homes. The latest funding round was led by investment firms Centaurus Capital and Doerr Capital, with support from energy giants ConocoPhillips and Shell Ventures. Returning investors such as Khosla Ventures and Gates Frontier, along with new backers like SiteGround Capital, H. Barton Asset Management, and the Jeffrey and Marieke Rothschild Foundation, also participated. Mazama Energy was originally incubated by Khosla Ventures, which has been a key supporter of the company since its early days.