Data center-focused cooling and automation solution provider Submer announced that it has raised $55.5 million in a new funding round, with proceeds aimed at supporting the copmany’s sustainable immersion cooling technology to help data centers cut costs and environmental impact.

The financing comes as AI-driven growth is driving a rapid increase in data center power demand. Over the past few months, several major tech companies, such as Microsoft, Google and Amazon, have highlighted increased energy needs to meet the AI-driven growth in data centers as a key challenge to their decarbonization goals. According to the International Energy Agency (IEA), data centers consumed 460TWh in 2022, with this figure projected to possibly double by 2026. Data centers also require a rapidly growing quantity of water for cooling purposes.

Founded by Daniel Pope and Pol Valls in 2015, Barcelona-based Submer provides technology enabling data centers to utilize immersion cooling to help increase capacity, use less power and water, and reduce costs. The immersion cooling process cools IT equipment in thermally conductive and dielectric liquid, capturing heat across all components, and making it easier to reuse the captured heat.

According to Submer, benefits of its immersion cooling technology include reduced power and water consumption and CO2 emissions, higher power density enabling less real estate usage, and protection of hardware from dust, moisture and vibrations, extending its lifespan.

Submer co-founder and CFO Pol Valls said:

“We are grateful for the strong interest from investors and are thrilled to partner with the ones who align with our sustainability values. With this strong backing, we are very well positioned to continue to lead the liquid immersion cooling market and meet the growing demands of hyperscale datacenters, enabling us to scale faster with our customers, while remaining focused on driving both growth and meaningful impact in our industry.”

The funding round was led by M&G from its £5 billion sustainability-focused Catalyst strategy, with participation from existing investors Planet First Partners and Norrsken VC.

Niranjan Sirdeshpande, Global Head of Catalyst Investments at M&G, said:

“As the global demand for AI and data capacity accelerates, we see Submer’s technology as a critical solution to alleviate the intensive energy and water requirements of digital infrastructure. We are excited to be supporting the company at this important time as they scale their products and services globally.”