Saudi Arabia based deeptech startup Strataphy has secured a $6 million seed round to scale its subsurface powered cooling technology for AI and industrial infrastructure. The financing is led by Outliers VC and Shorooq, with participation from PlusVC, signaling strong investor conviction in the company’s technical and commercial thesis. Headquartered in Khobar, Strataphy is positioning its geothermal platform as core infrastructure for data centers, giga projects, and cities across the Middle East and beyond.
Seed Round to Scale Subsurface Cooling
The fresh capital will be used to advance Strataphy’s technology stack and expand its full service offering, from design and deployment to ongoing operations. The company plans to grow its engineering and operations teams to support a growing pipeline of projects in Saudi Arabia, the wider MENA region, and the UAE. This seed round is intended to move Strataphy from proven pilots into broader commercialization across hyperscale data centers and industrial sites.
Addressing Cooling Constraints in Hot Climates
Cooling has become one of the biggest bottlenecks for hyperscale expansion and industrial growth, particularly in hot climate regions. In many sectors, cooling already accounts for nearly half of total electricity consumption, straining grids and squeezing margins. The Middle East represents one of the largest and fastest growing cooling markets globally, estimated at more than $120 billion annually, including around $13 billion in Saudi Arabia alone.
PrimeLoop Technology and Service Model
Strataphy’s platform is built around its proprietary PrimeLoop subsurface technology, which uses deep, stable thermal energy as a cooling source rather than relying solely on power hungry surface equipment. By tapping underground temperature stability, the system can cool data centers and industrial facilities with significantly lower power requirements than conventional solutions. Combined with a Cooling as a Service model that converts capital expenditure into predictable operating costs, the company aims to make advanced geothermal cooling accessible with minimal upfront investment.
Founder Expertise and Technical Foundations
Strataphy was founded in 2025 by CEO Dr. Ammar Alali and co founder Ahmed Alhani, who have worked together for more than 15 years at Saudi Aramco and other ventures. Alali holds a PhD in Earth Sciences and Energy Systems from the Massachusetts Institute of Technology, bringing deep subsurface and energy systems expertise to the company’s technology roadmap. Their shared background in geothermal systems, subsurface exploration, and energy optimization underpins PrimeLoop, which is purpose built for high temperature regions and engineered to overcome the limitations of traditional geothermal systems designed for heating in colder climates.
Early Deployments and Measured Impact
The company already works with a roster of high profile clients and partners, including NEOM, King Abdullah Economic City, Saudi Tabreed, Enersol, ADNOC Drilling, and Alpha Dhabi Holdings. These collaborations span giga projects and large industrial and commercial facilities, highlighting the urgency of efficient, scalable cooling in some of the world’s hottest environments. Strataphy reports that PrimeLoop has achieved electricity cost reductions of up to 49 percent compared with conventional cooling systems in commercial settings.
Investor Perspectives on Cooling Infrastructure
Investors view cooling as a critical but underappreciated lever in the region’s infrastructure transformation, especially as AI workloads intensify thermal and power demands. Outliers VC founder and general partner Mohammed Almeshekah describes Strataphy’s subsurface powered approach as a step change in reliability and energy use, arguing that cooling is becoming essential to sustain growth in AI and heavy industry. Shorooq founding partner Shane Shin characterizes cooling infrastructure as the “hidden backbone” of the AI and industrial revolution and says turning subsurface cooling into a scalable service can unlock a new layer of performance and sustainability across hot climate economies.
Strataphy’s $6 million seed round gives the company fresh firepower to scale a technology that directly targets one of AI infrastructure’s most pressing constraints. By combining proprietary subsurface cooling, a service based business model, and founders with deep geothermal expertise, the startup is positioning itself as a foundational player in the region’s next wave of data center and industrial build out. If it can replicate its early results at scale, Strataphy could help redefine how high growth, high temperature economies cool the infrastructure powering the AI and industrial revolutions.