Lumen Orbit, a startup looking to build data centers in space, was able to close its recent seed round in just a few days amid strong investor interest.
The Redmond, Washington-based company closed an $11 million seed round at a $40 million valuation, marking the company as one of the hottest startups in Y Combinator's summer 2024 batch. , corroborating TechCrunch's previous reporting that it had raised a competitive double-digit round. The deal was led by NFX (NFX general partner Morgan Beller will join the company's board of directors), with participation from venture capital firms such as Fuse.VC and Soma Capital, and scout funds including Andreessen Horowitz and Sequoia. .
Philip Johnston, co-founder and CEO of Lumen Orbit, told TechCrunch that investor demand was so high that more than 200,000 VCs contacted the startup, and the company has since expanded into more He said it has launched another SAFE round at a high valuation. Accept more investors.
This is a huge concern for a company that was only founded in January.
The company is building an orbital data center made up of pods that can hold compute and launch individually, connected to large solar panels in space in a cluster (concept image above). Lumen's goal is to build multi-gigawatt computing clusters by the end of the decade. These data centers use high-bandwidth optical lasers to send information back to Earth.
If successful, Lumen's technology will allow AI companies to scale without the size and power limitations of data centers on Earth, and at a fraction of the cost of operating data centers on land. There is a possibility that it will become.
“Instead of paying $140 million for power, you can pay $10 million for launch and solar power,” Johnston said.
The company plans to launch a demonstration satellite equipped with Nvidia's terrestrial GPUs in May. It plans to launch another test satellite next year that will be 100 times more powerful. Johnston said he hopes to present something at least once a year.
“Many space companies take five years to launch. We're on track to launch within 18 months,” Johnston said. “We'd rather make small changes and release them frequently than wait five years and make a bunch of incremental changes and release them.”
Johnston and co-founder Chief Technology Officer Ezra Feilden said they got the idea for the company from their days working in the space industry. Fieldon has 10 years of experience designing satellites for companies such as Airbus Defense and Space and Oxford Space Systems. As a consultant for McKinsey, Johnston worked with national space agencies in the Middle East on satellite projects. He is also the former founder of Opontia, a startup that expanded its digital brand in the Middle East and was acquired in late 2023.
Mr Johnston said he initially thought space solar power would be an interesting area of the market as the cost of launching satellites became cheaper and cheaper. The childhood friends soon realized that solar power was more trouble than it was worth considering the amount of energy required to send it back to Earth.
But data centers are different because they don't generate energy to send back to Earth. Instead, they absorb the sun's energy and mostly stay in place. Deep space is naturally cold, so data center construction also addresses cooling issues.
When Johnston and Feilden came up with the idea, they were introduced to Adi Ortian, a SpaceX engineer at the time who had also come up with the idea independently. Mr. Oltean joined the founding team as co-founder and chief engineer approximately one month after the company launched.
Building data centers in space and the deep sea is increasingly being talked about as a way to maximize the potential of AI. Multiple people in the AI community, from Bill Gates to Sam Altman to Elon Musk, have touted it as a potential solution to AI's growing data center and power problems.
Axiom Space is also working on developing an orbital data center, but the field is less crowded, at least for now. But that could change, as more AI industry professionals seem hungry for this kind of innovation.
Lumen's mission is ambitious, and the company's success depends on satellite launch costs continuing to fall and remain that way. But if successful, it could help AI scale as fast as we want, and perhaps need, while reducing some of the technology's impact on the Earth's climate.