Atomico backs Tem to help businesses buy renewable energy directly from sources

A U.K. startup wants to do for utilities what neobanks person been doing for nan financial assemblage for much than a decade: disrupt an age-old manufacture utilizing technology, streamline it and trim retired nan middlemen.

London-based Tem has built a marketplace and level to link businesses straight to renewable power sources, and it is moving pinch an existing Ofgem-regulated inferior partner alternatively of applying for a proviso licence itself. Ultimately, Tem is each astir enabling businesses to bypass alleged “big energy” and their large prices while making it easier to meet ambiance targets.

“We for illustration to deliberation of ourselves arsenic nan U.K.’s very first ‘neo-utility’,” Tem’s co-founder and CEO, Joe McDonald, told TechCrunch complete email.

Founded successful 2021, Tem connected Wednesday said it has raised £10.5 cardinal ($13.7 million) successful a Series A information led by European task superior patient Atomico, which closed 2 costs totaling $1.24 cardinal earlier this week. The finance comes as nations successful Europe and beyond strive to trim their c output and go “climate-neutral” by 2050. The U.K., specifically, is committed to reducing greenhouse state emissions by “at slightest 100% of 1990 levels” wrong nan adjacent 25 years.

At nan aforesaid time, rising lipid and state prices person underscored nan request to find an replacement solution to fossil fuels.

Aside from McDonald, Tem’s founding squad includes main exertion serviceman Bartlomiej Szostek, main commercialized serviceman Jason Stocks, and Ross McKay. All 3 met astatine a startup called Limejump that utilized large information to disrupt nan U.K. power market, and that was wherever nan seed for Tem was sown.

“I’ve worked for complete 12 years successful nan power industry, and during this time, nan winners and nan losers successful nan power marketplace person mostly remained nan same,” McDonald said. “Smaller businesses buying from large power person ever been deed pinch precocious fees, volatility, and nary guarantee of existent renewable energy. They’re stuck successful a strategy that doesn’t put group first. The deficiency of affordable cleanable power is 1 of nan biggest challenges for some businesses and nan planet. We wanted to guarantee immoderate business tin entree nan renewable power they request forever.”

Renewed energy

Tem’s level matches businesses’ power requirements pinch suitable renewable generators utilizing an “AI matching algorithm” that forecasts power proviso and request crossed buyers and sellers successful nan startup’s network. The institution provides its ain pricing and billing system, customer service, arsenic good arsenic an interface done which customers tin prime their renewable power priorities, preferred statement length, and spot information related to powerfulness depletion and wherever their power originates.

Tem claims to person immoderate 200 customers today, including Silverstone, location to nan British Grand Prix.

The Tem platformImage Credits: Tem

The startup channels a web of much than 50 renewable generators, which whitethorn see thing from a star aliases upwind workplace to anaerobic digestion plants specified arsenic those provided by U.K. biogas generator, Biodynamic.

While companies tin technically transact straight pinch galore of these renewable power sources, this typically involves semipermanent powerfulness acquisition agreements (PPAs) and complex, costly administration, which only really useful for nan biggest businesses.

“In specified a analyzable system, these [power purchase] agreements tin beryllium hundreds of pages long, return months to negotiate, and costs hundreds of thousands of pounds,” McDonald said. “What’s more, because nan customer needs to beryllium capable to bargain each of nan power that a generator produces, it only useful for really ample businesses pinch immense amounts of power usage. This is good if you’re a megacorporation for illustration Google aliases Amazon — but what astir nan different 99% of businesses?

Tem charges for a “variable” percent of each transaction, but it declined to disclose what determines that percentage. McDonald did note, though, that power prices are usually astatine slightest 10% cheaper than what they would beryllium connected nan wholesale market, and tin beryllium arsenic overmuch arsenic 25% lower.

Tem could use for its ain proviso licence and go a afloat independent supplier — arsenic some neobanks person done successful nan banking realm — but McDonald says that partnering pinch a third-party licence holder for illustration P3P Partners lets nan startup attraction connected its raison d’être.

“We could [apply for a license], but our attraction is connected nan tech and transforming nan buying and trading experience, not connected being a licensed utility,” he said. “We judge that for our exemplary to person maximum impact, we request to enactment supra individual marketplace integration.”

The authorities of play

Aside from large power and nan incumbent wholesale market, a number of younger companies person emerged to tackle this very problem. In Germany, we person nan likes of Trawa, which recently closed a €10 cardinal information of funding, while nan U.K. has companies for illustration Al Gore-backed Octopus Energy, which snapped up grounded renewable power rival Bulb backmost successful 2022 — that nonaccomplishment was mostly owed to soaring wholesale prices.

Tem says this is 1 of nan ways it differs from its competition. While Bulb sold itself connected nan premise that it originated power from renewable aliases offset sources, it really did that via nan accepted inferior markets.

“The power situation successful caller years has besides seen respective companies spell bust, creating marque spot issues related to caller startups successful nan power space,” McDonald said. “However, nan logic truthful galore caller suppliers neglect is that they run connected a accepted inferior exemplary successful a wholesale marketplace that exposes them to immense volatility and precocious transaction costs. We, connected nan different hand, mitigate these risks pinch our cautiously balanced, nonstop business-to-generator matching engine.”

Aside from lead investor Atomico, Tem’s Series A information saw information from AlbionVC, Revent, and angel backers including Holly and Sam Branson, and Wise executives Harsh Sinha and Nilan Peiris. Tem has raised £13 cardinal ($17 million) since inception.

The institution presently operates only successful nan U.K., but it is eyeing world description successful nan coming years — nan caller rate will apt thief pinch that plan.

“We will apt attraction connected Europe first, particularly markets pinch fierce renewable targets for illustration Germany, nan Nordics, and later nan U.S.,” McDonald said.