Starcloud, a space computing startup, has raised $170 million in a Series A funding round led by Benchmark and EQT Ventures, reaching a valuation of $1.1 billion.
The company, which recently emerged from Y Combinator, is developing data center infrastructure in orbit, aiming to address growing constraints around energy, land, and regulation affecting terrestrial data centers. The funding will support the expansion of its satellite-based computing systems and the development of larger-scale orbital infrastructure.
What The Company Does
Starcloud is building space-based data centers designed to process and store data in orbit rather than on Earth. Its approach involves deploying satellites equipped with high-performance GPUs capable of running AI workloads and processing data directly in space.
The company launched its first satellite in November 2025, featuring an Nvidia H100 GPU. A second-generation system, Starcloud 2, is expected to launch with multiple GPUs, including newer-generation chips and additional computing modules. These systems are designed to support tasks such as analysing satellite data and running AI models in orbit.
Looking ahead, Starcloud is developing a larger spacecraft, Starcloud 3, intended to function as a full-scale orbital data center. The system is designed to operate with significant power capacity and to be deployed using next-generation heavy-lift launch vehicles.
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Market Context / Industry Background
Demand for data center capacity continues to grow rapidly, driven by artificial intelligence workloads and cloud computing. At the same time, terrestrial infrastructure faces increasing constraints related to energy consumption, land availability, and regulatory limitations.
Space-based computing is being explored as a potential alternative, offering access to continuous solar energy and reduced dependence on Earth-based infrastructure. However, the model remains largely experimental, with significant technical and economic challenges.
A key dependency for the viability of orbital data centers is the development of lower-cost, high-frequency launch capabilities. Without this, the cost of deploying and maintaining infrastructure in space remains high compared to terrestrial alternatives.
The sector is still at an early stage, with only a limited number of advanced GPUs currently operating in orbit, compared to millions deployed in Earth-based data centers.
Founder / Investor Commentary
Philip Johnston, CEO and founder of Starcloud, stated that the company’s goal is to achieve cost competitiveness with terrestrial data centers, targeting energy costs around $0.05 per kilowatt-hour under favourable launch conditions. He noted that this will depend on the availability of lower-cost launch systems in the coming years.
Johnston also highlighted that the company’s early deployments have already demonstrated the ability to run advanced terrestrial chips in space, providing valuable insights into system performance and design requirements. He acknowledged that while current hardware may not be optimised for space environments, these initial experiments are informing future iterations.
Growth Plans / Use Of Funds
The newly raised capital will be used to scale Starcloud’s satellite deployments and advance the development of its larger orbital data center systems. The company plans to continue launching incremental versions of its spacecraft while working toward more powerful, distributed computing infrastructure in orbit.
In the near term, Starcloud will expand its existing satellite capabilities and continue supporting use cases such as processing data generated by other spacecraft. Over time, the company aims to enable more complex workloads, including distributed computing tasks that could integrate with Earth-based data centers.
The timeline for large-scale deployment depends on the availability of next-generation launch systems, expected later in the decade. In the interim, the company plans to continue deploying smaller systems using existing launch vehicles.
About Starcloud
Starcloud is a space computing company focused on developing orbital data center infrastructure. Recently graduated from Y Combinator, the company builds satellite-based systems designed to run AI and data processing workloads in space. Its mission is to create scalable computing infrastructure that can complement or extend beyond terrestrial data centers.
