Arkon Energy Pty Ltd., a company that operates data centers powered by renewable energy, has raised $110 million in funding to expand its infrastructure footprint.

TechCrunch reported the investment today. It was led by Bluesky Capital Management with participation from Kestrel 0x1 and Nural Capital. The raise brings Arkon’s total outside funding to more than $150 million.

Melbourne, Australia-based Arkon started building its data center network about two years ago by establishing a 5-megawatt facility in Brisbane. Five megawatts’ worth of electricity is equivalent to the energy consumption of 2,000 to 4,500 homes. Some modern data centers use dozens of times that amount to power the infrastructure they contain.

In 2022, Arkon expanded into Europe by acquiring data center operator Hydrokraft AS. The deal bought it a 30-megawatt facility in Norway that runs on hydropower. Shortly after closing the transaction, Arkon began making a series of upgrades to expand the data center’s infrastructure capacity, which it estimated at the time could be doubled to 60 megawatts’ worth of hardware.

The company marked another growth milestone last year when it raised $26 million and bought a 100-megawatt facility in Ohio. Using the $110 million funding round announced today, Arkon intends to purchase additional data centers in Ohio, North Carolina and Texas. The plan is part of a broader initiative on the company’s part to expand its capacity by 130% in the next six months.

Arkon Chief Executive Officer Josh Payne told TechCrunch that most of the company’s data center capacity in the U.S. is currently used by “institutional-grade” bitcoin miners. Its facilities are also suitable for hosting artificial intelligence models. To expand its presence in the latter market, the company will spend $30 million on optimizing its Norwegian data center for generative AI workloads. A key priority of the upgrade will be supporting customer projects focused on training large language models. 

Arkon is not the only data center company that has raised financing recently to capitalize on the rapid growth in AI demand. Stack Infrastructure Inc. raised $290 million last month through a sale of securitized notes, or loans marketed to investors. Like Arkon, it operates data centers where other companies can host their computing equipment.

Stack Infrastructure also builds custom data centers for its customers. When launching a new development, the company uses prepared blueprints and an established supply chain that it says can significantly speed up construction. Stack Infrastacture claims that its construction roadmap includes more than 4 gigawatts’ worth of data center capacity, with 1 gigawatts equivalent to 1,000 megawatts. 

Photo: Arkon