Hetzner Cloud can start instances from ISOs - here is an example for ipfire : https://wiki.ipfire.org/installation/hetzner-cloud
I got a VPS from Hetzner last year but they decided to block my home IP. After reading some anecdotes on the internet, I had to conclude they're exactly the kind of company I want to avoid (large, opaque, they employ weird algorithms/heuristics to flat out reject customers or suddenly take down their servers, no warning, you can't get an explanation, you're just fucked, just like when Google decides to arbitrarily block you; I've been there).
IMO the point of a hosting provider is supposed to be that you can have some peace of mind and not worry about your shit breaking (that's still a worry as I continue to host everything at home). Instead with providers like this, you worry about them breaking your shit.
And half an hour ago I was (once again) checking out hosting providers and lamenting the fact that most don't seem to offer support for loading custom ISOs so I could install a 30 megabyte distro and make the most out of the cheap plans that only offer something like 10 gigabytes of storage. Half of it is wasted after you install one of the these obese mainstream distros.