KuhlTherm has raised $1.1 million in a seed funding round led by Arkam Ventures. The startup is working on liquid cooling solutions, a space that is becoming more important as AI servers, data centres, electronics and high-performance machines generate more heat than older cooling systems can easily handle.

This may sound like a niche hardware story, but it connects directly to the AI boom. Faster chips need more power. More power creates more heat. If that heat is not managed well, systems slow down, fail faster or consume too much energy through air-conditioning.

KuhlTherm’s aim is to build cooling systems that can support this new generation of high-performance computing in a more efficient way.

What KuhlTherm does

The startup co-founded in 2025 by Vishant Gandhi, Kamish Kachhadia, Shailesh Bishnoi, Jasvipul Chawla, and Kishan Baravaliya.

KuhlTherm works on liquid cooling technology. Instead of relying only on air to remove heat, liquid cooling uses a fluid-based system to carry heat away from critical components.

In simple words, liquid can absorb and move heat more effectively than air in many high-power systems. That is why liquid cooling is becoming important in data centres, AI infrastructure, advanced electronics and industrial computing.

As AI workloads grow, servers are becoming denser. A data centre can no longer keep adding fans endlessly. At some point, better cooling design becomes necessary.

Funding details

KuhlTherm has secured $1.1 million in seed funding. The round was led by Arkam Ventures.

Seed funding is usually used to build the product, test early deployments, hire a core team, improve engineering and prepare for commercial pilots. For a hardware-led startup, this money can be especially useful because product development needs testing, materials, prototypes and customer validation.

Startup aim and purpose

KuhlTherm’s purpose is to solve a very practical problem – heat.

AI models, cloud computing, gaming systems, telecom equipment and industrial electronics are getting more powerful. But performance is not only about the chip. It also depends on whether the system can stay cool and stable.

If a server gets too hot, it may reduce performance to protect itself. If cooling is inefficient, electricity bills rise. If a data centre uses too much power for cooling, operating costs go up.

KuhlTherm wants to make cooling smarter and more efficient, so companies can run powerful systems without wasting as much energy.

Why liquid cooling matters now

For years, air cooling worked well enough for many data centres. But AI has changed the equation.

Modern AI chips can consume far more power than traditional server processors. When many such chips are packed into racks, heat becomes difficult to manage with fans alone.

Liquid cooling can help remove heat closer to the source. This can improve system performance, reduce stress on components and lower cooling energy needs.

For example, an AI data centre running heavy workloads may need continuous cooling day and night. Even a small improvement in cooling efficiency can save money at scale.

Where KuhlTherm may find demand

The most obvious market is data centres, especially those running AI and high-performance computing workloads.

The startup may also find opportunities in electronics manufacturing, EV battery systems, telecom infrastructure, industrial machines and edge computing setups where heat control matters.

The broader trend is clear. More devices are becoming powerful, compact and always connected. That means thermal management is no longer a back-end engineering issue. It is becoming a business requirement.

Competitors and market context

KuhlTherm will enter a space where global companies already work on cooling systems for data centres and high-performance computing. Players such as Vertiv, Schneider Electric, CoolIT Systems, Submer and other thermal management companies operate in related areas.

In India, the opportunity is also growing as data centre capacity expands and AI infrastructure investments increase.

KuhlTherm’s challenge will be to build products that are reliable, cost-effective and easy to deploy. Cooling systems cannot fail casually. Customers will want proof, testing data and service support before adopting new technology.

Challenges ahead

Liquid cooling is promising, but it is not simple.

Customers may worry about leakage, maintenance, upfront cost and integration with existing systems. Data centres already running air-cooled setups may not switch quickly unless the business case is strong.

KuhlTherm will need to show clear benefits – lower energy cost, better performance, safer operation and dependable long-term support.

For a hardware startup, scaling production is another challenge. Prototypes are one thing. Manufacturing at consistent quality is a different test.

Conclusion – Key takeaways

KuhlTherm’s $1.1 million seed funding led by Arkam Ventures gives the startup early capital to build and test liquid cooling solutions.

The company is working in a timely area. As AI servers and high-performance systems generate more heat, better cooling will become essential for performance, energy savings and reliability.

The startup’s purpose is simple but important – help powerful machines stay cool without wasting energy. If KuhlTherm can prove its technology in real deployments, it could find a strong place in India’s growing AI and data centre infrastructure market.

Facts Input- Entrackr

Bengaluru-based banking infrastructure startup Spense has raised $2.8 million in a seed funding round led by Arkam Ventures. The round also saw participation from Razorpay Ventures, GrowthCap Ventures, Atrium Ventures, and angel investors including Kunal Shah.

Spense was co-founded in 2022 by Pawan Kumar and Srinivas Krishnamurthy. The startup is building technology that helps banks launch modern credit products, such as credit cards and credit lines, without replacing their existing core systems.

This is an important problem to solve. Banks want to offer faster, more flexible credit products, but their older technology systems often make new product launches slow and expensive. Spense is trying to sit between old banking infrastructure and new-age fintech needs.

What Spense does

Spense builds banking infrastructure for secured credit products. In simple words, it helps banks offer credit backed by customer assets.

For example, a bank may want to offer a credit line to a customer based on deposits or other eligible assets. Traditionally, building such a product can take a long time because the bank has to connect core banking systems, deposit systems, card management systems and customer service workflows.

Spense helps connect these systems in real time. This allows banks to launch new credit products faster without rebuilding their entire technology stack.

Why the funding matters

The $2.8 million seed round gives Spense capital to move faster in a market where banks and fintechs are looking for better credit infrastructure.

The company plans to use the funds to deepen banking partnerships, speed up product development, expand its engineering and go-to-market teams, and launch Credit Line on UPI, also called CLOU.

Credit Line on UPI is an important area in Indian fintech. It can allow approved users to access credit through UPI instead of depending only on cards or traditional loans. If banks adopt this widely, it could become a major shift in everyday digital credit.

The next leap for Spense

The next leap for Spense is to help banks move from slow, manual credit systems to faster and more automated credit infrastructure.

This does not mean replacing banks. It means helping banks modernise from within. Many banks already have customers, deposits and trust. What they need is sharper technology to launch credit products quickly and manage them efficiently.

Spense’s platform uses AI to automate workflows in areas such as onboarding, servicing, collections and customer support. These are usually labour-heavy parts of banking. If automation works well, banks can reduce operational load and serve customers faster.

A simple example is customer onboarding. Instead of multiple manual checks and back-and-forth processes, AI-supported workflows can help verify, route and process applications more smoothly.

Why banks need this kind of infrastructure

India’s digital payments ecosystem has grown quickly, but credit still has room to become more flexible. UPI made payments easy. Now banks and fintech companies are trying to make credit more accessible while keeping risk under control.

Secured credit can be useful because it is backed by assets. This may reduce risk for banks compared with completely unsecured lending.

For customers, it can mean easier access to credit products linked to their existing banking relationship. For banks, it can create a new way to serve customers without taking unnecessary risk.

Where Spense fits in the fintech market

Spense is not a consumer lending app. It is an infrastructure company. That means its customers are likely banks and financial institutions, not regular users directly.

This is an important difference. A consumer may never see the Spense name while using a credit product. But the technology behind that product may help the bank process, approve, service and manage it.

This kind of business can grow quietly but deeply. If banks trust the platform, it can become part of their credit operations.

Competitors and market context

Spense will compete in a serious fintech infrastructure market. Comparable players may include Setu, Decentro, M2P Fintech, Zeta, Niro, RazorpayX and other banking technology or embedded finance platforms.

The competition will depend on the exact product area. Some companies focus on APIs. Some focus on cards. Some focus on embedded finance. Some focus on lending infrastructure.

Spense’s specific focus on bank-native secured credit and Credit Line on UPI can help it create a clear position if it executes well.

Challenges ahead

1. The first challenge is bank partnerships. Banks move carefully because credit is a sensitive area. Spense will need to show reliability, security and compliance.
2. The second challenge is integration. Banking systems are complex. Connecting core banking, deposits and card systems in real time is not easy.
3. The third challenge is AI accuracy. Automation can save time, but banks will expect strong controls, audit trails and human oversight where needed.
4. The fourth challenge is scale. Once a product goes live with a bank, it may need to handle large transaction volumes and customer requests without failure.

Conclusion with key takeaways

Spense’s $2.8 million seed funding shows growing investor interest in fintech infrastructure that helps banks modernize credit products. The startup is solving a practical problem – how banks can launch credit cards and credit lines faster without replacing their existing systems.

Key takeaways

• Spense raised $2.8 million in seed funding.
• The round was led by Arkam Ventures.
• Razorpay Ventures, GrowthCap Ventures, Atrium Ventures and angel investors including Kunal Shah participated.
• Spense was co-founded in 2022 by Pawan Kumar and Srinivas Krishnamurthy.
• The startup helps banks launch credit cards and credit lines backed by customer assets.
• The funds will support banking partnerships, product development, team expansion and Credit Line on UPI

Facts Input- Entrackr