Data center cooling tech startup Iceotope aims to scale after raising $26M

Liquid cooling system startup Iceotope Technologies Ltd. said today it has closed on a $26 million Series B round of funding as it strives to accelerate the adoption of its data center-focused hardware.

Two Seas Capital and Barclays Climate Ventures co-led the round, with participation from existing backers such as Edinv, ABC Impact, Northern Gritstone and British Patient Capital.

The U.K.-based startup is trying to take advantage of the growing demand for alternative data center cooling technologies that promise more efficiency than the traditional air cooling and direct-to-chip liquid cooling systems widely used today.

As artificial intelligence scales and spreads from the data center to the network edge, the challenge of cooling the graphics processing units and other chips that power it is becoming a critical problem. To solve it, Iceotope has developed a precision liquid cooling technology that enables AI systems to run at maximum power in any environment, with lower energy and water consumption than traditional cooling technologies.

The startup is pioneering the concept of “direct-to-everything” liquid cooling, which is an alternative to traditional air-based cooling systems that promises to enable greater AI server density and power more advanced workloads. Its flagship products are a pair of rack-based integrated liquid cooling systems for high-density AI inference.

Iceotope KUL AI is a data center-scale solution geared for rack deployments, while the Iceotope KUL BOX is a more compact offering designed for individual servers, making it suitable for edge workloads.

According to Iceotope, both of its products are designed to operate in harsh and space-constrained environments. They use a non-flammable dielectric coolant instead of water that’s piped around AI systems in order to absorb the heat generated by their components. The company is targeting a broad market, including cloud infrastructure providers and hyperscale data center operators, along with enterprises in the telecommunications and media industries, which increasingly require AI workloads to be processed on site.

SemiAnalysis says the market Iceotope operates in is said to grow dramatically in the coming years. It projects the installed base for liquid-cooled AI accelerators to grow from around 3 gigawatts to more than 40 gigawatts within just two years, representing a more than 10 times increase in deployments.

Iceotope’s co-founder Simon Jesenko, who serves as both chief executive and chief financial officer, said today’s round validates both the company’s technology and the enormous demand for it. “We’ve spent years developing a robust, differentiated IP portfolio and products that are purpose-built for AI infrastructure, and we’re ready to scale at precisely the moment the industry demands more advanced and sustainable cooling technology,” he said.

The startup will spend most of the funds from today’s round on product development and engineering in order to expand its portfolio of patents and ecosystem partnerships, which are essential for bringing its technology to market.

Steven Poulter of Barclays Climate Ventures said Iceotope has timed its rise perfectly, as data center operators are becoming increasingly worried about the limitations of traditional cooling systems. “It not only meets the escalating demands of AI and high-performance computing, but also materially advances data center sustainability,” he said.

Photo: Icetope