UK-based startup Tem has raised £10.5 million in Series A funding to expand its innovative platform that enables businesses to directly purchase renewable energy from generators, bypassing traditional utility markets. The funding round was led by Atomico, with participation from existing investors AlbionVC and Revent, alongside notable angel investors Holly and Sam Branson, and Wise executives Harsh Sinha and Nilan Peiris. With this round, Tem has raised a total of £13 million to date.

Tem’s Mission: Transforming the Energy Market

Founded in 2021, Tem's goal is to disrupt the energy sector by leveraging artificial intelligence (AI) to create a more transparent and affordable renewable energy marketplace. As the UK moves toward achieving its 2030 clean energy goals and rising fossil fuel prices highlight the need for alternative energy solutions, Tem’s platform offers businesses a direct, cost-effective way to access renewable energy sources. Tem CEO and co-founder Joe McDonald emphasizes that the platform is designed to democratize energy access, ensuring small and medium-sized businesses (SMEs) can obtain affordable renewable energy, a need further amplified by the recent energy crisis that saw prices soar.

The Technology Behind Tem: AI-Powered Energy Matching

At the core of Tem's platform is a proprietary AI-driven algorithm that matches businesses with renewable energy generators in real time. Tem’s AI engine processes up to 1.8 billion energy matches per second, accurately predicting fluctuations in supply and demand to ensure seamless transactions between energy buyers and sellers. By bypassing the wholesale energy market—an inefficient system dominated by fossil fuel providers—Tem helps businesses reduce their energy bills by up to 25%. This approach also guarantees 100% traceable renewable energy, providing businesses with more control over their energy mix and costs.

Challenges in the Current Energy Market

In the UK, renewable energy capacity has grown rapidly, with over 22,000 renewable energy generation sites spread across the country. However, the vast majority of businesses, especially SMEs, still rely on outdated methods to procure energy from the wholesale market, which remains costly and lacks transparency. Only large corporations with the resources to negotiate complex power purchase agreements (PPAs) with renewable generators have been able to fully benefit from direct access to renewable energy. This has left smaller businesses struggling with high energy prices, and forced to remain dependent on fossil fuels without the ability to influence their energy sources.

Tem seeks to bridge this gap by giving businesses of all sizes access to clean energy. The platform effectively removes middlemen, streamlining the procurement process while enabling renewable generators to receive a fair price for their energy. According to Joe McDonald, this technology provides a solution to a problem that has long plagued the UK energy market: the high transaction fees and opaque practices that prevent SMEs from embracing renewables.

The Investors and Tem’s Growth Potential

Atomico, a leading European venture capital firm, spearheaded the Series A round, bringing in its vast experience in scaling innovative startups. As part of the deal, Atomico partner Terese Hougaard will join Tem's board of directors, signaling the firm’s confidence in the startup’s future. Hougaard sees immense potential in Tem’s business model, noting that the company is positioned to unlock a $1 trillion global market for renewable energy transactions. Tem’s leadership team—comprising energy industry veterans from companies such as Limejump and Shell—offers the expertise necessary to capitalize on this market shift.

Tem’s current customers include over 200 businesses, such as the iconic British racing venue Silverstone. The platform's rapidly growing customer base demonstrates the strong demand for affordable renewable energy solutions across various industries.

The Road Ahead: Expansion Plans

Though Tem currently operates only in the UK, the company has set its sights on international markets. Europe, with its aggressive renewable energy targets, is a key focus for future expansion, particularly in regions like Germany and the Nordic countries. Tem also plans to explore opportunities in the United States, where renewable energy adoption is on the rise. The additional funding secured in the Series A round will be crucial in supporting these expansion efforts.

Tem has differentiated itself from other energy startups by partnering with existing Ofgem-regulated utility providers rather than applying for a supply license of its own. This allows the company to focus on its core mission: transforming the energy-buying experience through technology. While some energy startups have faltered due to reliance on volatile wholesale markets, Tem’s direct business-to-generator model provides stability and shields the company from market fluctuations.

Tem’s £10.5 million Series A funding marks a significant milestone in its mission to democratize access to renewable energy for UK businesses. By leveraging AI to streamline energy transactions, Tem is enabling companies of all sizes to cut costs and embrace clean energy. With the backing of prominent investors like Atomico, and a leadership team with deep experience in the energy sector, Tem is poised for continued growth. As it eyes international expansion, the company is well-positioned to play a crucial role in the global shift toward sustainable energy.