Server-cooling company Iceotope has raised several million pounds to expand its unusual liquid cooling technology that is said to offer "full-time free cooling for ICT anywhere".

The Sheffield start-up, which submerges servers in a coolant to prevent them from overheating, was backed by Alster Capital to the tune of $10 million (£6 million) as part of a “Series A” funding round alongside other investors including an unnamed UK financial firm, and Schneider Electric, one of America’s main server providers.

Iceotope, which unveiled its technology at the Cebit trade show in March 2012, said the investment will help the company hire more staff, expand into new regions and add to its current product ecosystem, while also enabling it to target  larger transactions and more ambitious supercomputing projects.

“We strongly believe that our technology has the potential to revolutionise the HPC and data centre industry and we’re thrilled that it’s not gone unnoticed,” said founder and CEO Peter Hopton. “The support provided by our new investors, along with a new partnership opportunity with Schneider Electric, will have a big impact on the development of the company and will allow Iceotope to build a global product ecosystem based on Iceotope liquid cooling platform.”

The majority of businesses cool their data-centre servers with fans and energy-intensive air conditioning systems that can cost millions of pounds each year to run but Icetope claims it can cut data centre energy bills in half with its controversial approach that involves filling aluminum server modules with Novec, an inert coolant liquid from American manufacturing firm, 3M.

The Novec carries heat from the server motherboard to the module's surface by natural convection. Water is pumped to the top of the rack, from where it trickles down over the modules to a heat exchanger. A secondary water circuit then carries the heat away, either to a rooftop cooling system or to regular domestic radiators.

The reduced energy consumption is likely to be welcomed by governments and green campaigners because the global IT ecosystem is said to account for ten percent of all electricity consumed on earth and this is largely due to the current energy demand of data centres, HPC and supercomputing facilities.

Since Iceotope installed its first production system at the University of Leeds in early 2012, the company has begun rolling out its cooling system throughout Europe. As part of this, Iceotope recently equipped the 3,200 sqft Poznan Supercomputing and Networking Centre in Poland where it achieved industry leading environmental figures.

Commenting on the investment, John Bean,  data centre cooling R&D director at Schneider Electric said: "We have been looking at various technical approaches to liquid cooling for years and concluded that Iceotope has created a scheme that addresses performance and user experience expectations."

Meanwhile, Jean-Marc, managing partner at Aster Capital, said: “Iceotope can deliver breakthrough energy efficient solutions into the area of data centres infrastructure. We have been impressed by the effort and the progress made by the Iceotope team in the last couple of years and we envision that, thanks to our corporate sponsors, especially Schneider Electric and Solvay, we will be able to strongly support Iceotope development and make it the future liquid cooling market leader within HPC and data centre markets.”

Iceotope was one of a handful of “clean technology” companies to embark on a government-backed trade mission from the UK to Colorado at the end of last year.