London-based vitality expertise firm Tem has raised $75 million in recent funding because it appears to be like to increase internationally and speed up the rollout of its AI-driven platform designed to chop enterprise electrical energy payments by as much as 30 per cent.
The funding spherical was led by Lightspeed Enterprise Companions and is known to worth the four-year-old firm at round $300 million. Tem plans to make use of the capital to additional develop its expertise and scale its operations within the US.
Based in 2021, Tem has constructed a platform it calls “Crimson”, described by the corporate as a neo-utility that makes use of synthetic intelligence to match electrical energy provide and demand instantly, bypassing the wholesale market and its a number of intermediaries.
Joe McDonald, Tem’s co-founder and chief government, stated the goal was to take away what he described as pointless “center males” from the vitality system. “We calculate that about $1 trillion is taken out yearly in transaction charges by ‘Huge Vitality’,” he stated. “Our mission is to take that price of transaction all the way down to zero.”
Tem’s software program is already being utilized by round 2,600 companies, together with Boohoo and Fever-Tree, to scale back electrical energy prices. Since launching Crimson in November 2024, the corporate says it has saved prospects $35 million in vitality payments. Two colleges have additionally signed up, with one saving £55,000 a yr, in response to Tem.
McDonald stated the inefficiencies of the present system made disruption inevitable. “I don’t see why each single electrical energy transaction gained’t be run by infrastructure like ours over the following ten years,” he stated. “There may be an excessive amount of inefficiency within the outdated course of that 99 per cent of transactions at the moment depend on.”
Tem was based by a workforce of vitality specialists together with Jason Shares, Bartlomiej Szostek, Ross Mackay and McDonald. The newest elevate takes complete funding to $94 million, with present buyers together with Hitachi Ventures and Atomico.
McDonald stated Crimson had been launched partly to show what Tem’s expertise might obtain. Over the long term, the corporate plans to license its platform to utilities globally to scale back their price per transaction. Two utilities are already utilizing the software program, though Tem has declined to call them.
“On the coronary heart of the issue is the vitality transaction itself,” McDonald stated. “If I’m a enterprise shopping for electrical energy, I’m usually paying 25 to 30 per cent greater than the fee at which it’s generated. That’s as a result of the transaction passes by means of as much as seven intermediaries, every taking a lower.”
Tem says it has facilitated round two terawatt hours of electrical energy transactions up to now, roughly equal to powering Liverpool for a yr. Its Crimson service is run by two AI brokers supported by a workforce of simply 4 individuals.
“A conventional utility would wish round 170 workers to serve the identical variety of prospects,” McDonald stated. “That exhibits how expertise infrastructure can remodel effectivity, whereas additionally enhancing the shopper expertise.”
With vitality prices nonetheless a significant concern for UK and worldwide companies, Tem is betting that AI-driven infrastructure, fairly than incremental reform, will reshape how electrical energy is purchased and offered.
