Starcloud raises $250 million for orbital data centers as launch options dry up
There's about to be a big fight to secure access to space.
Starcloud, a company developing satellites capable of performing AI inference in orbit, has secured an additional $250 million extension to its March $170 million Series A funding round, bringing its total funding to $420 million. The $250 million extension values the company at $2.3 billion. The additional capital will enable Starcloud to expand its manufacturing capacity and progress its largest orbital data center spacecraft, Starcloud-3, which is designed to launch on SpaceX's upcoming Starship rocket.
CEO Philip Johnston is leveraging the funding to secure launch capacity as the market for rocket transportation tightens. Starcloud has already submitted an application to the FCC to operate 88,000 spacecraft. The CEO emphasized the importance of securing launch contracts, as SpaceX's Falcon 9 program is set to end in 2028. Starcloud is currently focusing on launching two new generation 8 kw compute satellites, known as Starcloud-2, using rideshare flights in 2027 for tasks like orbital inference for customers, including US government agencies.
The company is exploring options such as purchasing a dedicated Falcon 9 launch or signing contracts with other providers to support future missions. Starcloud's expansion is centered around the potential of SpaceX's Starship to reduce launch costs, allowing the company to build an orbital inference layer that competes with terrestrial data centers.
Johnston expressed confidence in SpaceX's ability to demonstrate the Starship's capabilities, with SpaceX CEO Elon Musk hinting at a possible delay in attempting to catch a returning Starship rocket. The $250 million extension was led by Manhattan West Ventures and included participation from Nvidia, Cisco, Benchmark, EQT, Soma, NFX, 776, Cedar Capital, Goanna Capital, and Standard Capital.
Starcloud is notable for being the only company currently operating an Nvidia H100 terrestrial data center GPU in orbit, having trained a model using it. Nvidia's investment signals confidence in Starcloud's advantages in the emerging space compute sector. The company aims to fly Starcloud's first purpose-built GPU for space, the Vera Rubin Space-1 chip, developed by Nvidia, sometime in late 2028.
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