Tem Raises $75M To Remake Electricity Markets Using AI

AI Electricity Trading Startup Tem Raises $75M to Reshape Power Markets

London-based energy startup Tem has secured $75 million in Series B funding to expand its AI-powered electricity marketplace across global markets. The company uses artificial intelligence to match renewable energy generators with business consumers, promising savings up to 30% on commercial energy bills while accelerating grid decarbonization. With AI data centers driving unprecedented electricity demand, Tem's transaction engine aims to bring efficiency and transparency to fragmented wholesale power markets.

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How AI Is Rewiring Electricity Markets

Electricity markets have long operated on rigid, legacy systems designed decades before artificial intelligence entered the conversation. Generators bid into regional grids, utilities purchase blocks of power, and businesses absorb whatever pricing structures emerge—often with little visibility into real-time supply fluctuations or renewable availability.

Tem flips this model by deploying machine learning algorithms that analyze grid conditions, weather patterns, generator output, and consumption forecasts simultaneously. Its transaction engine identifies micro-opportunities where renewable supply exceeds demand—often during midday solar peaks or windy overnight periods—and routes that power directly to enrolled business customers. The result: cheaper electricity for buyers and higher revenue capture for renewable generators who might otherwise curtail production.

"We're not just another energy supplier slapping a green label on conventional power," explains Joe McDonald, Tem's co-founder and CEO. "We built a genuine marketplace where AI acts as the central nervous system—matching supply and demand in five-minute intervals rather than the industry-standard half-hour blocks. That granularity creates value that simply didn't exist before."

The $75 Million Bet on Smarter Grids

Tem's recently closed Series B round was oversubscribed, signaling strong investor confidence in AI's role in energy transition. Led by Lightspeed Venture Partners with participation from AlbionVC, Allianz, Atomico, Hitachi Ventures, Revent, Schroders Capital, and Voyager Ventures, the funding values the startup at over $300 million.

Unlike many climate-tech ventures burning cash for growth, Tem emphasizes it already controls its path to profitability. Yet McDonald deliberately chose expansion over bootstrapping. "We could run a lovely, profitable UK-only business," he acknowledges. "But the climate challenge isn't local. We're building infrastructure for a global energy transition—which means entering markets where AI-driven flexibility matters most."

The capital will fuel Tem's entry into Australia and the United States, beginning with Texas. The Lone Star State's ERCOT grid—famous for its volatility and high renewable penetration—presents an ideal testing ground. With wind and solar regularly supplying over 50% of Texas's power and data center demand surging, the need for intelligent load-balancing has never been more acute.

Why Businesses Are Switching Energy Providers

Tem has already onboarded more than 2,600 business customers across the United Kingdom, primarily small-to-midsize enterprises in manufacturing, hospitality, and retail. These companies share a common pain point: unpredictable energy costs eroding thin margins.

Traditional utility contracts often lock businesses into fixed rates that ignore real-time grid dynamics. When wholesale prices spike during cold snaps or heatwaves, those costs eventually flow downstream. Tem's model sidesteps this by purchasing power dynamically—buying aggressively when renewable generation floods the grid and prices dip negative, then drawing from stored credits during peak periods.

One UK bakery chain reported 28% lower annual energy costs after switching to Tem. During a recent wind-rich week, the company's ovens ran almost entirely on near-zero-cost wind power sourced through Tem's platform. "We're not changing how we operate," notes the chain's operations director. "We're just benefiting from smarter procurement we couldn't access before."

The Data Center Dilemma Driving Innovation

Tem's timing aligns with an inflection point in global electricity demand. AI data centers now consume power at scales once reserved for small nations. A single next-generation training facility can demand 300 megawatts—equivalent to 250,000 homes. This surge strains grids already balancing aging infrastructure and renewable integration.

Critically, these facilities require 24/7 uptime, making them poor candidates for simple demand-response programs that ask users to power down during shortages. Instead, they need intelligent procurement that secures clean power without compromising reliability.

Tem's AI engine addresses this by forecasting both supply availability and consumption patterns days in advance. When a data center's cooling load will spike during an afternoon heatwave, the system pre-positions renewable contracts to cover the surge. When AI training workloads shift to overnight hours, it pivots to wind-heavy portfolios. This anticipatory approach prevents businesses from becoming involuntary contributors to grid stress.

Building Trust in Algorithmic Energy Trading

Despite AI's promise, energy markets demand rigorous trust frameworks. A miscalculation could leave hospitals or factories without power. Tem addresses this through layered safeguards: human oversight teams monitor all algorithmic trades, physical backup contracts remain in place with traditional suppliers, and the platform never commits more power than physically available on the grid at any moment.

Transparency also plays a key role. Customers receive monthly breakdowns showing exactly when their power came from solar, wind, or other sources—plus how much they saved versus standard tariffs. This emphasis on verifiable outcomes builds credibility in an industry historically wary of tech disruption.

"We're not selling magic," McDonald states plainly. "We're selling math. And increasingly, that math outperforms human traders who can't process terabytes of weather, grid, and consumption data in real time."

From Marketplace to Grid Stabilizer

Tem's ambitions extend beyond cost savings. As renewable penetration grows, grids face new stability challenges. Solar drops off at sunset; wind lulls unpredictably. Traditional "peaker" plants burning natural gas fill these gaps—but at high emissions and cost.

Tem envisions its aggregated business customers becoming a distributed flexibility resource. By slightly adjusting non-critical operations—delaying pool heating by 20 minutes, pre-cooling warehouses before a solar dip—the platform could deliver grid-balancing services currently handled by fossil plants. Early pilots with UK industrial partners show promising results, with participants earning revenue for providing this flexibility while maintaining operations.

This evolution positions Tem not merely as an energy retailer but as infrastructure essential to deep decarbonization. Regulators in several markets are already exploring frameworks to compensate such distributed resources fairly—a shift that could dramatically accelerate adoption.

Why This Model Could Scale Globally

Electricity market structures vary wildly worldwide, but three trends create fertile ground for Tem's approach:

First, renewable energy now undercuts fossil fuels on cost across most developed markets. The challenge isn't generation—it's integration.

Second, commercial electricity demand is becoming more volatile and intelligent. EV fleets, data centers, and industrial automation all create flexible loads that AI can optimize.

Third, climate regulations are tightening. The EU's Corporate Sustainability Reporting Directive and similar frameworks now require businesses to disclose Scope 2 emissions—making clean, traceable power procurement a compliance necessity, not just a brand choice.

Tem's marketplace model adapts to each regulatory environment while delivering consistent value: cheaper power for buyers, better revenue for green generators, and reduced strain on public grids.

The Bottom Line on AI-Powered Energy

Tem's $75 million raise signals more than investor enthusiasm—it reflects growing consensus that artificial intelligence will fundamentally reshape how electricity moves from generators to end users. The startup isn't replacing engineers or grid operators; it's giving them unprecedented tools to balance supply and demand at machine speed.

For businesses facing volatile energy bills, the value proposition is straightforward: significant savings with zero operational changes. For society grappling with climate deadlines, the stakes are higher. Every megawatt-hour shifted to intelligently matched renewables accelerates the transition away from fossil-dependent grids.

As Tem expands into Texas and Australia this year, the world will watch whether algorithmic energy trading can deliver at continental scale. If successful, the company won't just reshape electricity markets—it could help ensure those markets survive the dual pressures of AI-driven demand growth and urgent decarbonization. The electrons powering our future may soon flow not by human schedule, but by artificial intelligence optimizing for both planet and profit.