0
1
0
1
2
3
4
5
6
7
8
9
0
0
1
2
3
4
5
6
7
8
9
%

As data center usage heats up, Submer raises $55.5M to cool things down

There is a catch to all this competition for better chips and data center capacity to handle AI workloads. Heat—a lot of it—comes with a lot of processing power, which has big effects on how servers work and the environment.

There is a catch to all this competition for better chips and data center capacity to handle AI workloads. Heat—a lot of it—comes with a lot of processing power, which has big effects on how servers work and the environment.

Startups that employ novel strategies are gaining popularity as a result of the fact that conventional cooling methods like air and water are unable to meet the demand. One of them is Submer, which has its headquarters in Barcelona and recently raised $55.5 million at a valuation of half a billion dollars to expand its business: a system in which racks are completely submerged in vessels containing a proprietary, non-conducting, biodegradable coolant that was compared to an “amniotic fluid” by the company’s co-founder, Pol Valls. The racks operate from these vessels. Users of some models can also choose to capture heat from their own cooling process and use it to heat buildings or other places.

Already, Submer’s business is boiling over. According to Valls, who co-founded the business with CTO Daniel Pope, at least one of the world’s largest and most well-known “hyperscalers,” which operates a number of data centers, are among its customers; telecom firms such as Telefonica; businesses such as ExxonMobil; organizations such as the European Commission; and significant research facilities. The company’s chief financial officer, Valls, declined to identify several individuals.)

This round, an all-equity Series C led by M&G with participation from previous backers Planet First Partners and Norrsken VC as well as new investor Mundi Ventures, is valued at approximately $500 million post-money due to that list and the pipeline that is currently under discussion. Additionally, the option to raise more in the round has been left open.

The problem that Submer is trying to solve is partly technological and partly related to how much money and resources are used.

Simply put, AI is leading the data center industry down the drain, which is already a significant consumer of energy.

The International Energy Agency’s most recent estimates put data center consumption at 460 TWh in 2022, or between 1 and 2 percent of global energy consumption. By 2026, this could more than double to 1,000 TWh, “roughly equivalent to Japan’s electricity consumption,” according to the IEA’s prediction.

A ChatGPT search, on the other hand, “needs nearly 10 times as much electricity to process as a Google search,” according to a May Goldman Sachs research paper. By 2030, the paper predicted a 160% increase in data center power demand. The “growing carbon footprint” of AI and the billions of cubic meters of water required to cool these data centers have been cited by other researchers.

The Submer technology comes into play here. We have previously mentioned that Pope’s prior experience managing data centers and Valls’ programming skills helped them come up with the idea of developing a superior method for data center cooling. Pope was aware of the limitations of data centers, and Valls could see that the speed of technology would require more processing power in the future.

The product was developed with the assistance of a network of retired industrial engineers and material scientists. According to Valls, it includes a coolant that is proprietary, biodegradable, non-flammable, and has the viscosity of water. Additionally, it has a smart container in which server racks can be installed and operated.

Submer now offers a variety of containers and immersion fluids. In some models, the water cooling system that keeps the coolant cool can be run through a heat exchanger and used to heat a building, for example.

The startup’s journey has not always been easy. The pair submitted an application to Y Combinator in 2016, optimistic about their work.

At the time, Submer’s product might have appeared to be an unappealing solution for a very unappealing company. To really focus industry minds and propel the company’s business forward, it took the recent explosion of computing, first sparked by the rapid migration of applications to the cloud and then more recently by the AI boom.

According to Valls, the company is currently developing an ecosystem in which server component manufacturers are developing components compatible with Submer’s solution because they are sufficiently intrigued by the company’s offerings.

Valls stated, “We have agreements with the major OEMs of servers.” Although it appears to require a lot of time and effort, scaling these is becoming increasingly simple. He said, “Its pitch is pretty straightforward.” We display the data. It prolongs the servers’ lifespan and produces no particles, dust, or noise. Dell, Supermicro, Intel, and a variety of others are among these partners.

According to Pitchbook, the startup is currently a standout among its peers in terms of money raised and valuation. It has raised approximately $100 million, including the round we covered in 2020. Others adopting the fluid arrangement strategy remember Icetope for the U.K and two new businesses out of Texas. One, LiquidStack, only recently received funding from Tiger Global. The National Science Foundation and the United States Department of Defense provide financial support for the other, Green Revolution Cooling.

Submer must sign up more partners and customers in the near future. It’s interesting that the company recently hired a new CEO with a lot of experience in business. In January 2024, Patrick Smets assumed the role of CEO after initially joining Submer as COO in August 2023.

Join our newsletter to stay updated

Related Posts

Join Our Newsletter

Services

Lets Get In Touch