Exclusive: Read the 9-page memo hyperscaler startup Nscale used to raise a $155 million Series A

• Nscale has raised $155 million in Series A funding for its hyperscaler platform.
• The startup offers everything from access to data centers to GPU infrastructure.
• BI got an exclusive look at the pitch memo the startup used to secure the fresh funds.

Nscale, a London-based startup providing companies with access to data centers and clusters of AI chips, has raised $155 million in fresh funding.

The startup, which came out of stealth in May 2024, bills itself as a fully integrated AI infrastructure platform.

As a hyperscaler, Nscale provides the "full stack" of technologies companies need to train and run AI applications like large language models. That includes data centers, software, and graphics processing units, Nscale's founder and CEO Joshua Payne told Business Insider in an interview.

The startup differentiates itself from AI cloud providers, such as Lambda Labs and Coreweave, which offer only specific components, such as GPUs, in the AI infrastructure layer. By providing everything from its own data centers to virtualized GPU nodes, Payne said that the company could leverage better unit economics than its competitors.

"The problem for the industry is chicken and egg. Take an LLM customer — they may want 10,000 GPUs, but they don't have the expertise for that," he told BI. "Many of our competitors don't own their own data centers, so they have to license them. In our case, we have all of that in-house. Given that we are able to own all those segments in the value chain, we're faster and cheaper."

Payne said that Nscale pivoted to focus on AI infrastructure across the full stack after the public release of ChatGPT-3. "So our thesis was, if this is indeed the fourth industrial revolution as people are claiming, then how would you build a resilient AI cloud that would survive commodity cycles? said Payne. "We found the best way to do that was to vertically integrate it, building both data centers, GPUs, and software."

Since it emerged from stealth, it has rapidly grown its pipeline of greenfield data center capacity across Europe and the US from 300 megawatts to 1.3 gigawatts.

The startup makes its money by building data centers, purchasing GPUs, and deploying AI cloud services, which it then leases on an hourly basis. Clients can sign contracts for any given period of time to use the services.

Sandton Capital Partners led the $155 million round, which also included participation from Kestrel, Bluesky Asset Management, and Florence Capital. The startup previously raised more than $30 million in pre-seed and seed funding, with the size of those early-stage rounds reflecting investors' heightened appetite to back startups operating in the AI infrastructure layer.

With the fresh funding, Nscale plans to invest in large clusters of GPUs and also double down on software development for its public cloud platform, which will be released in January 2025.

BI got an exclusive look at the 9-slide memo the startup used to secure fresh funding.