UK data-centre cooling startups raise ~$362m as AI heat load climbs
UK companies building data-centre cooling and heat-reuse technology have raised approximately $362 million in disclosed equity funding, placing Britain second globally behind the United States, according to a market snapshot compiled by Tracxn and published in July 2026. The figure is anchored by two companies: London-based Deep Green, which closed a $255 million Series D in 2023, and Sheffield-based Iceotope, which has raised $107 million across rounds dating back to 2013, including a $26 million raise completed in May 2026.
The backdrop is a sharp escalation in the heat that AI workloads generate. The International Energy Agency projects that global data-centre electricity use will roughly double from around 485 TWh in 2025 to approximately 950 TWh by 2030, and that server power density rose around elevenfold between 2020 and 2025. NVIDIA's Blackwell GB200 NVL72 systems ship liquid-cooled by design, with rack power density reported to have climbed from roughly 20 kW to more than 135 kW per rack. NVIDIA has said liquid cooling can deliver up to 25 times the energy efficiency and 300 times the water efficiency of comparable air-cooled designs.
Two companies, two policy levers
The UK's two funded companies represent distinct approaches to the same underlying demand. Iceotope manufactures precision liquid cooling systems that circulate dielectric fluid directly across server components, limiting evaporative water loss. Its May 2026 round drew from investors including nVent, British Patient Capital, Barclays and Northern Gritstone.
Deep Green operates immersion-based edge data centres and redirects the waste heat to local users such as leisure centres and district heating networks. Its $255 million Series D was provided by Octopus Energy Generation through the Octopus Energy Transition Fund, a structure that brings infrastructure-style capital into the energy-transition category via data-centre heat reuse. A first data-centre-fed heat network is reported to be under construction in West London.
The two routes address different sides of a tightening regulatory picture. Heat network zoning introduced under the Energy Act 2023 treats data centres as a legitimate heat source for district heating, and Ofgem began regulating heat networks in January 2026. On the water side, approximately 84% of proposed water-intensive data-centre developments sit in areas that are already water-stressed or are projected to be so by 2040, according to analysis cited in the report. UK data centres were designated Critical National Infrastructure in 2024, yet they face no mandatory water reporting obligation, and the Environment Agency's National Framework for Water Resources excludes data-centre demand from its forecasts even as it projects a public water-supply shortfall of nearly 5 billion litres a day across England by 2055.
Global standing and the wider cohort
Beyond the two funded companies, the Tracxn dataset identifies twelve UK businesses spanning the full cooling stack, from chip-level direct-to-chip systems (Infiniflux) through rack and enclosure cooling (Iceotope, Comino Grando, CoolTera) and facility-level air and evaporative systems (EcoCooling, Excool, Airedale, Eaton-Williams, Data Centre Cooling/Weatherite) to heat reuse (Deep Green, Omniko, ThermAI). Most of the wider cohort has not disclosed funding.
Globally, the cooling and heat-reuse sector has attracted more than $2 billion across 117 rounds tracked by Tracxn, with 2026 year-to-date funding reaching $585 million across eleven rounds, already above the full-year 2024 total of $306 million. The US leads with roughly 63% of cumulative global funding; the UK holds approximately 18%, ahead of Singapore at around 10%. The largest rounds globally in 2026 to date went to US-based Frore Systems ($143 million) and Singapore's EPG ($100 million), pointing to a competitive international field.
The report notes that the UK's ranking is cumulative and rests on a small number of funded companies rather than a broad field. With early-stage cohort members such as Infiniflux and Comino Grando yet to close disclosed rounds, the authors characterise the near-term outlook as one of building commercial track records in advance of further capital deployment as AI-driven cooling demand continues to rise.