Tem Secures $75M to Expand AI Energy Trading to US and Australia

Tem, a London startup founded in 2021, has raised $75 million in a Series B funding round. The company builds software that uses artificial intelligence to automate trading in electricity markets. Lightspeed Venture Partners led the investment, with other backers joining in. Tem plans to take its technology to the United States and Australia next.

Background

Tem started when four people who used to work at an energy software firm called Limejump saw problems in how electricity gets bought and sold. Those founders are Joe McDonald, the CEO, Jason Stocks, Bartlomiej Szostek, and Ross Mackay. They launched the company four years ago to fix what they saw as outdated ways of handling energy deals.

Back then, electricity markets relied on human traders and old computer systems. Buyers and sellers often went through as many as seven middlemen. This setup added fees and made it hard to track where energy came from. Large companies could sign long-term deals directly with power producers, but smaller businesses could not. Bills stayed high, and renewable energy like wind and solar did not flow easily into the grid.

Tem built a platform to change that. It connects businesses directly with renewable energy generators. The software skips the traditional wholesale market. Instead, it matches supply and demand in real time. This came after Tem raised about 13 million pounds in earlier funding rounds. Those rounds included a Series A led by Atomico, with help from AlbionVC, Revent, and others. That money helped Tem grow in the UK, where it now serves businesses and generators.

The energy world shifted fast in recent years. Renewable sources grew, but grids built decades ago struggled to keep up. Weather changes made supply unpredictable. Businesses faced bill jumps of over 100 percent in some crises. Tem saw a chance to use new tools like machine learning to make things smoother.

Key Details

The new $75 million round brings Tem's total funding to over $88 million. Lightspeed led it. Atomico, AlbionVC, Revent, Hitachi Ventures, Voyager Ventures, and Schroders Capital also put in money. This group mixes venture firms with big company investors, showing wide interest in Tem's approach.

Tem calls its core product a transaction engine. It runs on AI that forecasts when energy will be available and when businesses need it. The system checks 1.8 billion possible matches every second. It picks the best ones and handles the deals automatically. Businesses get renewable power that is fully traceable, down to half-hour blocks. They know exactly where their energy comes from.

How the Platform Works

Take a small factory in the UK. Under old rules, it buys power through utilities and wholesalers. Fees pile up. With Tem, the factory signs up for Renewable Energy Direct, or RED. The AI scans generator output from solar farms or wind turbines nearby. It matches needs second by second. Payments settle fast through Tem's system. The factory saves up to 25 percent on bills. Generators get better prices without middlemen.

Tem handles billing, reports, and proof of green energy. It acts like a new kind of utility. Users see data on savings and origins. This setup works for small and medium businesses that could not access big power deals before.

"Small and medium-sized businesses are critical in tackling climate change and are desperate for energy they can trust after seeing their bills soar by 124 percent during the recent energy crisis," said Joe McDonald, CEO and co-founder of Tem. "We built tem so that any UK business can get affordable energy while powering the clean energy transition from their doorstep."

The company has operated in the UK for years now. It processes high-speed trades to balance grids. Human traders used to do this by hand, but AI does it faster and cheaper.

What This Means

Tem's expansion to the US and Australia opens big new markets. Both countries have old grid systems under strain. In the US, states push for more solar and wind, but transmission lines lag. Volatility hits hard when clouds cover panels or winds die down. Australia's remote areas and heavy solar use create similar issues. Tem's tools could help balance these flows with less waste.

Businesses there stand to gain from lower costs. Factories, offices, and shops could cut energy spending. Generators would sell more directly, speeding up renewable builds. Grids might run steadier, avoiding blackouts from mismatches.

This funding lets Tem hire more staff and build out its software. It needs to adapt for local rules, like different market times or voltage standards. Success could push other firms to follow. Electricity trading, long stuck in the past, might see faster change.

Investors bet on growth as clean energy demand rises. Governments set net-zero goals, needing tools like Tem's to hit them. If the platform delivers in new lands, it could reshape how power moves globally. Smaller players get a seat at the table. Renewables flow freer. Costs drop across the board.

Tem keeps focus on its UK base while eyeing abroad. The $75 million gives runway to test and scale. Markets there mirror UK challenges: too many middle steps, rising renewables, cost pressures. Tem's direct model fits right in.

The startup now values automation over manual work. Its engine bids, forecasts, and settles trades. Teams of traders shrink. Errors drop. Speed rises. This shift comes as data and AI mature enough to handle real-time energy flows.

Broader effects touch jobs and infrastructure. Fewer traders mean shifts in skills needed. But new roles open in software and data. Grids upgrade indirectly as software eases bottlenecks. Policy makers watch, as cheaper clean power aids green targets.