-  News

Renewable energy start-up tem. raises £2.5m to disrupt the energy market

Discover why we are excited about tem.

tem. has raised a £2.5m in seed funding, led by Albion Capital, to address one of the most pressing needs of energy generators and buyers today – automatically matching supply with demand. The funds raised will be spent on expanding the team, developing the product and re-opening the currently oversubscribed platform to more customers in 2023.

tem.’s AI-driven platform identifies the best possible matches between businesses and renewable energy generators and directly manages the end-to-end transaction between all parties.

This allows businesses, for the first time, to bypass inefficient utilities and purchase energy based on their unique needs, thus democratising greater access to true, traceable, renewable energy, while cutting transaction costs by up to 10x.

tem.’s founder and CEO Joe McDonald commented:

We’re looking to make a significant, sustainable impact on the energy markets and build a platform for renewable commodity transactions globally, replacing the outdated energy trading companies and helping our customers to reduce their carbon footprint while saving money on their energy bills.

Why we invested in tem.

By Adam Chirkowski, Investment Director

The energy market minefield

The energy market is one of the largest global markets on the planet. It is also one of the key fronts in the fight against climate change with the transition to renewable energy being a crucial step on the path to achieving net zero. This is highlighted by the $1tn invested in that transition in 2022, according to Bloomberg. In the UK last year, renewable energy generation represented c.40% of electricity, up from c.15% 10 years earlier. The government is targeting the full decarbonisation of the UK’s electricity generation by 2035, which means that trend is only set to continue over the coming years.

Given the energy system’s importance in our day to day lives, as well as for the planet’s future, it may come as a surprise (or maybe not if you’ve looked at your energy bills recently) that it is a system that is broken and has been for some time now. It’s antiquated, not fit for purpose and crying out for disruption.

The energy transaction process is designed to ensure that the same parties win and, by counterpoint, the same ones lose, with few alternatives. The number of links in the value chain of a transaction – from brokers, traders, utilities, exchanges and back again with each one taking margin at each step (as much as 20% in total of each transaction) – creates a confusing maze that is hard to understand and navigate. For businesses trying to meet net zero targets, how can they be sure that what they’ve ended up with is true renewable energy instead of some greenwashed imposter?

The obvious solution is to transact directly with the generators themselves rather than entering the traditional energy market minefield. Cut out the inefficiencies, remove the abysmal customer experience and both sides of the deal can benefit financially. However, in such a complex system, agreements trying to achieve this run to hundreds of pages, take months to negotiate and cost hundreds of thousands of pounds. Fine if you’re Google or Microsoft and have resources you can dedicate to it, but what about the other 99% of businesses? Most businesses don’t have the resources to navigate the maze and are often left underserved by utilities but overburdened by their costs. After all, net zero cannot be solely the remit of global corporations; it should be and, with ever increasing ESG requirements, must be a task for all.

Simplifying renewable energy transactions 

It’s clear that the status quo is unsustainable. Things need to change and the one positive stemming from the energy crisis is that it has forced market participants into a willingness to look at new disruptive business models.

Which is where tem. comes in. tem. has developed a platform to simplify renewable energy transactions, opening the market up to the other 99%. Using their data driven forecasting and matching engine, tem. is democratising renewable energy by automatically identifying the best possible utilisation and generation matches between small businesses and generators. It then enables the two sides to transact directly in a way which puts the customer at its heart.
The end result is 100% verifiable renewable energy where the customer pays less and the generators earn more with a vastly enhanced user experience on both ends; win-win.

What it takes to disrupt the market

Building a company like tem. requires a blend of experience and know-how which spans the worlds of energy, tech, software development and FinTech. This is a mix of skills is a rarity in this space. It also requires the drive, ambition and vision to take on these antiquated behemoths.

Albion places a lot of emphasis on founders as part of our investment decisions and tem.’s founding team of Joe, Jason, Bartoz and Ross have the blend of skills, personalities, deep domain knowledge and experience that matches our requirement. Having worked together as pivotal members of the Limejump team, not only have they been through the scale-up-to-exit journey in the energy space before (benefitting from all the learnings along the way), but they’ve also built forecasting models, trading platforms, and an energy ‘black book’ to go with it.

There’s a long way to go and a huge amount of work needed to be able to scale tem. and achieve their vision, it’s a seed stage company after all, but they’re in a great place to start the journey.

And what about the ultimate vision and ambition which will pull them through the challenges ahead? This is best summed up by the text I received from Joe shortly after completion; “Looking forward to building the future of energy with you!” If we’re looking for ‘founder market fit’ for seed stage companies, there are few examples as impressive as tem. That’s what makes it so exciting.

Related News