The new capital will be used for next-generation Starcloud-3 satellites, establishment of a dedicated manufacturing facility, headcount expansion and procurement of future launch contracts.

Space-tech infrastructure start-up Starcloud has achieved unicorn status after raising $170m in Series A funding, at a valuation of $1.1bn, for building its space-based data centres.

The new capital will be used for the design and construction of the company’s next-generation Starcloud-3 satellites, the establishment of a dedicated manufacturing facility, critical headcount expansion and the procurement of future launch contracts, it said.

Starcloud, based in the US state of Washington and founded in 2024, is building data centres in low Earth orbit to work around the constraints and limitations of ground-based centres, and feed the computing power and energy demands of the AI boom by harnessing solar power.

“The AI revolution is colliding with the physical limits of our terrestrial energy grid. We are quickly running out of places to build new energy projects for data centres on Earth,” said Philip Johnston, Starcloud’s CEO and co-founder.

“By moving AI compute to space, we unlock access to unlimited solar power and completely remove the energy bottleneck. This funding allows us to rapidly scale our orbital infrastructure and meet the massive commercial demand for sustainable AI compute.”

Starcloud-1, the company’s first satellite, was launched last November and deployed the most powerful GPU in space, the Nvidia H100, as well as demonstrating AI model training and operations from space, according to the start-up.

Starcloud-2 is scheduled for launch in 2026, will generate 100 times the power of its predecessor, and will be the company’s first satellite to run commercial edge and cloud workloads for customers and partners such as Crusoe, AWS, Google Cloud and Nvidia, according to Starcloud.

The latest funding was split into two tranches, with an initial round led by Benchmark with participation from EQT, and an extension round co-led by both investors.

There was also participation from Macquarie Capital, NFX, Nebular, Y Combinator, Adjacent, 776 Ventures, Fuse Ventures, Manhattan West and Monolith Power Systems.

Angel investors included General Stephen Wilson, former Boeing CEO Dennis Muilenburg, and former Starbucks CEO and Goldman Sachs board member Kevin Johnson.

As part of the financing, Benchmark general partner Chetan Puttagunta will join the board of Starcloud.

He said: “We believe that we are in the early innings of a decades-long buildout of AI infrastructure. Starcloud is pioneering a solution to the challenges of scaling AI infrastructure on Earth with orbital data centres.”

Irish investor Finn Murphy of Nebular was an early backer of Starcloud, which was co-founded by Johnston, CTO Ezra Feilden and chief engineer Adi Oltean.

Other companies are sending data centres to space too. Elon Musk’s SpaceX is utilising its Starship rockets for this purpose, while Musk previously said: “In the long term, space-based AI is obviously the only way to scale.”

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