Exergy3 secures £10m seed to supply industry with heat from thermal storage
This article covers Exergy3, a University of Edinburgh spinout startup, which has raised £10m in a growth funding round to commercialise thermal storage technology that converts surplus renewable electricity into high-temperature industrial heat. The development aims to support industrial decarbonisation by turning curtailed renewable power into usable process heat, helping reduce emissions and ease grid curtailment.
Exergy3, a University of Edinburgh spinout, has raised £10 million in a growth funding round to commercialise its thermal storage technology that converts surplus renewable electricity into high-temperature industrial heat. The raise aims to help industry reduce emissions, address grid curtailment and strengthen energy security as Europe grapples with rising system costs and wasted renewable generation.
Why it matters
Industry accounts for a large share of energy demand and is hard to decarbonise because many processes require sustained, high temperatures. At the same time, increasing renewable generation is creating moments when low-carbon electricity cannot be absorbed by the grid. The UK spent around £2.7 billion on balancing the grid in 2024/25, a symptom of that mismatch between supply and demand.
Turning curtailed or negative-priced renewable electricity into usable heat could both lower industrial energy costs and reduce system-level waste. Exergy3’s proposition targets this intersection: using surplus electricity as an input rather than letting it be curtailed.
Inside the product
Exergy3 makes modular thermal energy storage units designed to convert renewable electricity into heat at process temperatures from 50°C to 1,200°C. The company says the units are compact and intended for relatively straightforward installation with minimal additional infrastructure, allowing integration for direct-heat applications or steam generation.
The technology has already been validated in a first-of-a-kind demonstration system, and the new funding will be used to scale manufacturing capacity, expand the team and accelerate commercial deployments across industrial sites.
Who are the investors?
The round was led by Axeleo Capital through its Article 9 Green Tech Industry I fund. Other participants include Bayern Kapital, a Bavarian public venture capital investor, and Singapore-based Kibo Invest’s climate tech fund. Existing backers Scottish Enterprise, Zero Carbon Capital and Old College Capital, the University of Edinburgh’s in-house venture fund, also took part.
In the announcement, Guillaume Sarlat, Venture Partner, Axeleo Capital, said:
Decarbonising heavy industry – accounting for over 20% of global energy consumption and still largely fossil-based – is arguably one of today’s most compelling climate hardware venture capital opportunities in Europe. Exergy3 uniquely leverages curtailed and negative-priced renewable electricity, storing it at ultra-high temperatures to deliver low-cost, zero-carbon heat to industrial customers. Convinced by the Exergy3 team’s deep technological expertise and exceptional execution capabilities, we at AXC Greentech Industry are proud to lead this £10 million seed round in support of their commercial rollout.
In the announcement, Monika Steger, Managing Director of Bayern Kapital, said:
The decarbonisation of industrial process heat is a key lever for the transformation of energy-intensive industries and at the same time a highly relevant growth market for climate tech in Europe. Exergy3 is developing a technologically promising solution at the intersection of energy, industry, and decarbonisation. As a VC investor, we see significant commercial potential here. The fact that Exergy3 intends to further develop its technological potential from Munich in the future also underlines Bavaria’s attractiveness as a location for industrial innovation.
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Founder perspective
In the announcement, Markus Rondé, CEO of Exergy3, said:
These are two sides of the same problem. Industry needs reliable, high-temperature heat, while large amounts of renewable electricity are going to waste. Exergy3 brings them together – turning surplus renewable power into reliable, low-cost heat for industry. That means lower emissions, lower energy costs, and a more resilient energy system. This funding allows us to move rapidly from pilot to commercial deployment.
Exergy3 plans to double headcount by the end of the year and open a Munich office as part of a wider European expansion aimed at industrial markets in Germany and beyond.
The bigger picture
The deal highlights active interest from greentech investors in hardware solutions that address both industrial emissions and grid flexibility. If widely adopted, technologies that convert curtailed renewable electricity into process heat could reduce reliance on fossil fuels in energy-intensive sectors while improving utilisation of renewable assets.
For the UK and Europe, the move also underscores practical approaches to dovetailing industrial decarbonisation with power system needs: using existing renewable capacity more efficiently rather than only adding storage or generation. Exergy3’s Munich expansion shows the company is positioning itself across two of Europe’s major industrial and innovation hubs, reflecting the cross-border nature of the challenge and the market for industrial-heat decarbonisation.
They've invested in Exergy3
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| Investor | Sector | Stage | Activity | Team | Connect |
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 Bayern Kapital | 3 investments investments | more info | |||
 Kibo Invest | 5 investments investments | more info | |||
 Scottish Enterprise | 32 investments investments | 4 contacts contacts | |||
 Zero Carbon Capital | 2 investments investments | more info | |||
 Old College Capital | 14 investments investments | more info |
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