Validus Raises $10M for DC Power Play

Validus DC Systems, which makes DC power infrastructure products for data centers, has received $10 million in a first round of venture funding led by Oak Hill Venture Partners, the company said today. Validus was founded in 2002 as a spinoff from equipment vendor DSA/Encore, and has been developing a line of DC power products. The company made its first public presentation of its technology at the DataCenterDynamics show in New York early this year, but has now come out of stealth mode and opened its web site to the public.

The financing will be used to accelerate commercial deployments of Validus' integrated DC power infrastructure, according to Validus, which said earlier this year that it was working on several client sites. Validus has developed an end-to-end DC system using a -575V DC power distribution system and patented power converter unit to provide -48V DC at the point of use. The company says its approach can improve energy efficiency by 40 percent compared to existing AC systems.

The investment marks a vote of confidence in the future of DC power distribution as a means to improving the energy efficiency of data centers. The benefits of DC have been advocated in a white paper from The Green Grid and a study from Lawrence Berkeley National Lab. But many data center professionals remain leery of DC power, and some vendors (notably APC-MGE) argue that high-voltage AC configurations would be a better approach than DC power distribution.

"This significant investment by Oak Hill Venture Partners is further validation that Validus technology can deliver the promised benefits of DC power in a scalable and modular design that businesses can use within existing IT infrastructure," said Rudy Kraus, CEO and founder, Validus DC Systems. "Data center efficiency is no longer just an IT issue; it's one of the most pressing concerns across all levels of business management."

Kraus previously co-founded Encore Power & Environmental (now DSA/Encore), which provided $4 million of seed capital in 2002 to start the company. The Validus DC solution was developed in partnership with Dr. Marcel Gaudreau, former head of Massachusetts Institute of Technology's Plasma Science and Fusion Center. The company says the final offering represents more than five years of development and more than 100,000 team hours.

"The Validus DC Systems business is a direct fit for our datacenter investment focus," said David Brown, Managing Partner at Oak Hill Venture Partners. "The company has designed an end-to-end DC power distribution system that offers compelling power savings and increased server density versus conventional solutions. This business is well positioned for substantial growth in the next few years as an increasing number of datacenters migrate to higher efficiency power delivery that is also environmentally friendly."