tem secures £55m to automate business energy contracts with AI engine
tem has raised £55m in a series B funding round to expand its AI-native transaction infrastructure for business energy contracts and accelerate international growth. The London-founded energy startup says the capital will fund product rollout and entry into new markets including Texas and Australia — moves that could reshape how companies buy and manage power.
Why it matters
Energy procurement remains complex and opaque for many businesses, with fees and risk premiums embedded in long contracts. tem’s proposition is to simplify that flow by automating price discovery and execution, which, if successful at scale, could lower costs for energy buyers and change the economics for generators and new market entrants.
The raise arrives as demand for flexible, affordable power becomes more strategic. Data centre electricity demand is projected to rise sharply — the company cites a 165% increase by 2030 — while electrification and industrial energy needs are intensifying. That combination is driving investor interest in technologies that can reduce procurement frictions and lower operating bills across sectors.
Inside the product
tem says its stack has two main components. Rosso is an AI-powered transaction engine intended to strip hidden fees and inefficiencies from energy deals and execute contracts end to end. RED is the customer-facing neo-utility built on top of Rosso, providing an interface for businesses and brokers to buy, sell and manage energy.
Tem reports operational traction: in 2025 it facilitated over 2TWh of transactions, claims more than 2,600 customers and an annualised gross transaction value of about £219.5m. Named customers include Boohoo Group (online retail), Fever-Tree (beverage manufacturer), Silverstone Circuit (event venue) and Newcastle United FC (professional sport), which illustrate use cases across retail, manufacturing, venues and large facilities. The company also states it can reduce business energy bills by up to 30%, a figure that underpins its claim to offer a structural price advantage as its data pool grows.
Beyond serving end customers through RED, tem plans to offer Rosso as infrastructure for incumbents and new utility brands, aiming to create network effects that deliver better prices and simpler fulfilment across the market.
Who are the investors?
The series B is described as oversubscribed and increases tem’s total financing to about £68.8m. Investors in the round include Lightspeed Venture Partners as lead, with strategic follow-on participation from Hitachi Ventures, Voyager Ventures, Schroders Capital and Allianz. Existing backers AlbionVC, Atomico and Revent also participated. As part of the round, Paul Murphy, partner at Lightspeed Venture Partners, will join tem’s board.
In the announcement, Paul Murphy, Partner at Lightspeed Venture Partners, said:
tem is one of those rare companies whose insight, technology and roadmap to scale all line up. They’ve combined deep market expertise with exceptional engineering, and a plan with global potential from day one. We back a small number of companies each year, and between the clear market demand and the economics of tem’s model, which align perfectly - tem stood out immediately. We’re excited to work alongside them as a true partner as they scale globally.
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Founder perspective
In the announcement, Joe McDonald, CEO and co-founder of tem, said:
Energy underpins every industry in the world, and yet no one has succeeded in course-correcting the fundamentally flawed way the markets work. For decades, the industry has tried to patch over the costly inefficiency of energy transactions with new utility brands and new promises. The real opportunity in energy looks a lot like what fintech did to banking: rebuild the core infrastructure, then let innovation explode on top of it.
That’s exactly what tem is doing. We’re building the world’s first AI-native infrastructure for energy transactions - making them fairer, more transparent, and radically more efficient. But more importantly, we’re unlocking the next generation of energy companies. Thousands of new brands, neo-utilities, and market participants will be able to plug into tem and compete on a level playing field. This funding allows us to set a new global standard for how energy is transacted - whether that’s powering a warehouse in Manchester, a neo-utility in Texas, or one of the largest utilities in the world.
McDonald’s comments restate tem’s goal to turn its transaction engine into underlying infrastructure for a broader market, not just a single retail offering.
The bigger picture
Tem’s fundraising is another signal that UK energy tech startups can attract significant venture capital when they combine real customer traction with a technology play that addresses market inefficiency. The company’s international ambitions — prioritising Texas and Australia — reflect a broader pattern of UK startups testing export markets where energy markets and commercial demand dynamics differ.
How effectively tem can convert transaction automation into durable margins for customers and partners will determine whether this model scales beyond early adopters. For the UK and European energy ecosystem, the round highlights continued investor appetite for software-driven approaches that aim to modernise legacy infrastructure at the heart of the economy.
They've invested in tem
Get to know these energy investors
| Investor | Sector | Stage | Activity | Team | Connect |
|---|---|---|---|---|---|
 Lightspeed Venture Partners | 13 investments investments | 28 contacts contacts | |||
 Hitachi Ventures | 2 investments investments | 12 contacts contacts | |||
 Voyager Ventures | 3 investments investments | more info | |||
 Schroders Capital | 5 investments investments | 2 contacts contacts | |||
 AlbionVC | 57 investments investments | 6 contacts contacts | |||
 Atomico | 18 investments investments | 23 contacts contacts | |||
 Revent | 3 investments investments | more info |
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