London-based startup Tem is tackling one of the modern energy sector’s biggest challenges: rising electricity costs driven by AI data centers. The company has developed an AI-powered electricity transaction engine designed to lower prices compared with traditional energy traders. With more than 2,600 business customers across the U.K., Tem promises savings of up to 30% on energy bills for companies that switch to its utility division.
The startup recently closed an oversubscribed $75 million Series B round, led by Lightspeed Venture Partners with participation from AlbionVC, Allianz, Atomico, Hitachi Ventures, Revent, Schroders Capital, and Voyager Ventures. This latest funding values Tem at over $300 million and will fuel its international expansion, beginning with Australia and Texas in the U.S., according to CEO Joe McDonald.
Tem operates a dual-business model. The first, called Rosso, is its AI-driven transaction engine, which uses machine learning to predict energy supply and demand, cutting out multiple layers of intermediaries. “With AI, you can replace human labor and disparate systems with a single infrastructure, bringing customer prices closer to wholesale electricity costs,” McDonald explained. The second, RED, is a “neo-utility” that demonstrates Rosso’s value and currently serves as the platform’s first customer.
The company’s approach focuses on renewable energy generators and small businesses, but it scales to enterprise clients as well. Tem’s roster includes fast-fashion retailer Boohoo Group, beverage company Fever-Tree, and Newcastle United FC. McDonald emphasizes that long-term growth will depend on allowing other utilities to use Tem’s infrastructure rather than trying to monopolize the market.
By positioning itself as an infrastructure play similar to AWS or Stripe, Tem aims to modernize the electricity market while keeping prices fair and accessible. As the global demand for AI-driven energy solutions grows, Tem’s strategy highlights a future where machine learning not only drives tech innovation but also makes energy consumption smarter, cheaper, and more sustainable.
source: Techcrunch