Space data center firm Starcloud has secured new funding to fuel its growth.

The company this week announced it has raised a $170 million Series A, at a $1.1 billion valuation.

The round 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. The round also saw participation from NFX, Nebular, Y Combinator, Adjacent, 776 Ventures, Fuse Ventures, Manhattan West, and Monolith Power Systems. Angel investors joining the round included Gen. Stephen Wilson, former Boeing CEO Dennis Muilenburg, and former Starbucks CEO Kevin Johnson.

The new capital will help accelerate the design and production of the company's Starcloud-3 satellites and fund a dedicated manufacturing facility, as well as go towards the growing headcount and help with procurement of future launch contracts.

Starcloud claimed it is now the fastest startup to reach unicorn status in Y Combinator history, achieving a $1bn valuation 17 months after its Y Combinator demo day.

"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 centers on Earth,” said Philip Johnston, co-founder and CEO of Starcloud. “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."

Founded in 2024 and previously known as Lumen Orbit, the company hopes to deploy hundreds of very low Earth orbit (LEO) satellites to act as a distributed data center for other satellites, reducing the need to send data to the ground.

The company has raised $200 million to date. Investors include In-Q-Tel, NFX, Y Combinator, FUSE, Soma Capital, and scout funds from Andreessen Horowitz and Sequoia.

As part of the latest funding round, Benchmark general partner Chetan Puttagunta will join the Starcloud board.

“We believe that we are in the early innings of a decades-long buildout of AI infrastructure,” said Puttagunta. “Starcloud is pioneering a solution to the challenges of scaling AI infrastructure on Earth with orbital data centers. Their extraordinary engineering team has achieved significant technical breakthroughs in power and cooling, as well as innovative advancements in manufacturing processes. Most notably, the great team at Starcloud has reached these milestones while remaining exceptionally capital efficient. We believe their technical rigor and remarkable ambitions will enable them to achieve extraordinary scale.”

Starcloud sent an Nvidia H100 GPU to space on a test satellite in November – the first time an Nvidia GPU has gone to orbit. A second satellite is due to launch this year.

It plans to deploy some 88,000 satellites, and has previously detailed ideas for a huge 5GW deployment featuring a 4km sq solar array.