Tem Raises Funds to Revolutionise Energy Transactions

A London-based technology firm, Tem, has secured $75 million in a funding round led by US investor Lightspeed Venture Partners. The investment values the four-year-old company at approximately $300 million and will enable further development of its technology aimed at reducing business energy bills.

Tem’s innovative platform, known as Red, has the potential to cut energy costs for businesses by matching supply and demand while bypassing traditional wholesale market intermediaries. Joe McDonald, Tem’s co-founder and Chief Executive, expressed confidence that the current energy transaction model is inefficient, stating that the aim is to eliminate middlemen altogether.

The software developed by Tem has already been adopted by 2,600 businesses, including notable brands such as Boohoo and Fever-Tree. These businesses have reportedly saved significant amounts, with some achieving reductions of up to 30 per cent on their energy bills.

McDonald highlighted that about $1 trillion is extracted each year in transaction fees by major energy companies. Tem’s mission is to drastically reduce these costs, making every electricity transaction more efficient. Since its launch in November 2024, Red has saved its customers around $35 million, demonstrating the immediate impact of its technology.

Tem plans to license its platform to utilities globally, with two unnamed utilities already utilising its software. McDonald believes that by addressing inefficiencies in energy transactions, Tem can transform the industry over the next decade.

In a stark contrast to traditional utilities, the streamlined operations of Tem involve only four employees managing thousands of customers. This efficiency highlights the potential for technology to reshape not just energy transactions but also customer experiences across the sector.

Overall, Tem is poised to challenge established practices in the energy market, with ambitions to make substantial improvements in transaction costs and efficiency.