Submer Secures $55.5M to Revolutionize Data Center Cooling as AI Demand Soars

Submer founders Pol Valls Soler left and Daniel Pope right

As the race for advanced chips and data center capacity intensifies in the age of AI, one challenge looms large: heat. Heavy processing power generates substantial warmth, impacting server performance and raising environmental concerns. Traditional cooling methods like air and water are struggling to keep pace, paving the way for innovative startups. Among them is Barcelona-based Submer, which has just raised $55.5 million at a valuation of $500 million to scale its unique cooling solution.

Submer’s technology involves submerging entire server racks in a proprietary, biodegradable coolant that co-founder Pol Valls describes as akin to “amniotic fluid.” This approach not only cools but also enhances operational efficiency. The company already serves a diverse range of clients, including major players like one of the world’s largest hyperscalers, telecom giant Telefonica, corporate titan ExxonMobil, and key government bodies like the European Commission.

Valls, now CFO of Submer, highlights the importance of this funding round, led by M&G and supported by investors like Planet First Partners, Norrsken VC, and newcomer Mundi Ventures. This influx of capital positions Submer to tackle the dual challenges of technological advancement and resource efficiency in the energy-hungry data center sector.

According to the International Energy Agency (IEA), data centers consumed 460 TWh of energy in 2022, accounting for 1% to 2% of global energy consumption. This figure is projected to more than double to 1,000 TWh by 2026—equivalent to Japan’s total electricity consumption. AI’s power demands exacerbate this situation, with Goldman Sachs reporting that a single ChatGPT query requires nearly ten times the energy of a Google search. By 2030, data center power demand could surge by 160%.

Recognizing these pressing issues, Valls and co-founder Daniel Pope—who previously managed data centers—developed Submer’s innovative solution. Their biodegradable, synthetic coolant, which mimics the viscosity of water, is paired with smart containers that house server racks. The product not only reduces energy consumption but also minimizes dust and noise, significantly extending the lifespan of servers.

While Submer has encountered its share of challenges, including an early rejection from Y Combinator, the company has gained momentum in recent years. The explosive growth of cloud computing and AI has shifted industry focus towards sustainable solutions, driving interest in Submer’s technology.

Today, Submer is forging partnerships with major server manufacturers like Dell and Intel, integrating their cooling technology into the broader ecosystem. “It took a lot of time and effort, but we’re scaling our partnerships and making it easier to collaborate,” Valls explains. Their pitch is straightforward: data-driven insights that prove the effectiveness of their solution.

With this latest funding round, Submer has raised around $100 million in total, distinguishing itself in a competitive landscape that includes startups like Icetope in the U.K. and Texas-based LiquidStack and Green Revolution Cooling.

As the company moves forward, it faces the task of expanding its network of partners and customers. Recently, Submer appointed Patrick Smets as CEO, who brings a wealth of corporate experience after joining as COO just months prior. With fresh leadership and a commitment to innovation, Submer is poised to transform the future of data center cooling as demand for processing power continues to heat up.

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