Submer Raises $55.5M to Cool Data Centers Amid Soaring Usage

The surge in AI workloads is pushing the demand for better chips and increased data center capacity, but with this growth comes a significant challenge: heat generation. Managing this heat is critical for the smooth operation of servers and minimizing the environmental impact. Traditional cooling methods, such as air and water cooling, are increasingly insufficient to meet the demands of high-intensity processing. This has opened up opportunities for innovative solutions, and startups with new cooling technologies are gaining traction. One such company is Barcelona-based Submer, which recently secured $55.5 million in a Series C funding round, bringing its valuation to $500 million.

Submer’s unique approach involves submerging entire server racks in vessels filled with a proprietary, biodegradable, non-conducting coolant, which co-founder Pol Valls describes as akin to “amniotic fluid.” This method not only cools the servers efficiently but also has the added benefit of capturing heat from the cooling process, which can be repurposed for applications such as heating buildings. The company’s solution addresses both the technological challenges of cooling high-performance servers and the growing concerns around energy consumption and environmental impact.

Submer’s business is already thriving, with customers that include major telecoms like Telefonica, corporates such as ExxonMobil, government bodies like the European Commission, and a prominent hyperscaler with multiple data centers. Although Valls declined to name several key clients, the customer base reflects the company’s strong foothold in the market.

The equity round was led by M&G, with participation from previous backers Planet First Partners and Norrsken VC, as well as new investor Mundi Ventures. With the option to raise additional funds, the company is positioned to scale further, capitalizing on the growing need for efficient cooling technologies.

The broader challenge Submer is addressing lies in the increasing energy consumption of data centers, exacerbated by the rise of AI. 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 could more than double to 1,000 TWh by 2026, equating to Japan's total electricity usage. Additionally, a Goldman Sachs report from May highlighted that AI processes like a ChatGPT query require nearly 10 times the energy of a typical Google search, projecting data center power demand to grow by 160% by 2030. The environmental toll is not limited to energy usage; AI workloads also significantly increase the carbon footprint and water consumption for cooling.

Submer’s technology, born from the co-founders’ combined expertise in programming and data center operations, tackles these challenges by offering a more efficient cooling system. Working with retired industrial engineers and material scientists, they developed a synthetic, biodegradable coolant with a water-like viscosity that is non-flammable and environmentally friendly.

This innovative coolant, carefully housed in advanced smart containers, represents a significant leap forward in data center cooling technology. By utilizing this coolant, server racks can function efficiently without the drawbacks typically associated with traditional cooling methods, such as excessive energy consumption and environmental impact. Traditional cooling systems often rely on air conditioning units that consume large amounts of power and generate considerable waste heat, necessitating complex and energy-intensive cooling processes.

In contrast, Submer's approach enhances the operational efficiency of data centers by employing a liquid cooling strategy that effectively dissipates heat directly from the server components. This method not only reduces the reliance on air conditioning but also minimizes the overall energy footprint of the facility. The smart containers housing the coolant are designed to optimize thermal management by providing real-time monitoring and control over the cooling process. This intelligent system can adapt to changing conditions within the data center, ensuring optimal performance and preventing overheating without the need for constant manual intervention.

As the data center industry increasingly seeks more sustainable solutions to meet the demands of growing data consumption and cloud computing, Submer's innovative technology positions the company as a leader in this transformation. By offering a more efficient and environmentally friendly alternative to conventional cooling methods, Submer contributes to the overarching goal of reducing carbon emissions and promoting sustainability within the tech sector. The shift toward liquid cooling not only supports energy conservation efforts but also enhances the performance and longevity of server equipment, further solidifying Submer's role as a pivotal player in the evolution of data center operations.