ClearFlow raises $72 million Series B to retrofit AI data centers with water free cooling
Sofia Reyes ·
ClearFlow, an Austin based startup that builds closed loop liquid cooling systems for high density servers, said Tuesday it raised a $72 million Series B to accelerate deployments at existing data centers. The round, announced on a busy Tuesday funding slate, targets operators that are adding AI compute but face rising water constraints and utility scrutiny.
The deal underscores a shift in venture appetite toward hard ROI infrastructure tied to the AI buildout, rather than model companies. Operators report higher total cost of ownership for GPU clusters, and regulators in the United States and Europe are tightening rules on water withdrawals near large campuses.
Breakthrough Energy Ventures led the financing, with participation from NVentures, BlackRock Climate Infrastructure, and existing backers Energy Impact Partners and Lowercarbon Capital, according to the company. ClearFlow has raised $108 million to date and plans to use the capital for manufacturing capacity, channel partnerships with colocation providers, and field engineering.
ClearFlow sells modular, dielectric coolant based units that recirculate fluid in a sealed system, which the company says reduces water consumption by more than 95 percent compared with evaporative cooling in similar workloads. Pricing is a mix of upfront installation per kilowatt of IT load and a recurring software and service fee that monitors thermal performance and uptime.
Management shared a handful of operating metrics that investors will watch. The company reported 18 active sites and 62 megawatts under contract, up from 11 sites a year ago. Blended gross margins are 45 percent today, with a target above 55 percent as software share increases, and net revenue retention is 129 percent driven by customer expansions as GPU density rises.
The thesis aligns with where growth equity has been most active in 2026. Capital has flowed to suppliers that take friction out of the AI infrastructure stack, including power, cooling, and networking, where customers have clear payback windows. ClearFlow claims six to twelve month paybacks based on water savings, higher rack density, and reduced downtime, although that will vary by region and utility tariffs.
The competitive field is not thin. Established vendors in immersion and direct liquid cooling sell into the same budgets, and hyperscalers often keep thermal strategies in house. ClearFlow’s defensibility rests on retrofit speed and software that validates thermal gains against service level agreements.
For the broader sector, today’s round signals that venture investors remain selective in AI, favoring equipment and software that de risk data center expansion and lower operating expense. As AI demand outpaces grid and water capacity, startups that deliver measurable cost reductions with minimal downtime will likely find more Tuesday term sheets.