Tim raises $75 million to reshape electricity markets using AI

At a time when AI data centers are driving up electricity prices, London-based startup Team believes AI may be able to help solve the problem too.

Tim built an AI-based energy transaction engine to lower prices compared to other energy traders. The company has signed up more than 2,600 business customers across the UK on the promise that buying energy from its utility division can save them up to 30% on their energy bills.

The startup recently closed a $75 million oversubscribed Series B led by Lightspeed Venture Partners with participation from AlbionVC, Allianz, Atomico, Hitachi Ventures, Revent, Schroders Capital, and Voyager Ventures, TechCrunch has learned exclusively.

A source familiar with the deal told TechCrunch that the round values ​​Tem at more than $300 million. The startup plans to use the funding to help expand to Australia and the United States, starting with Texas.

“We’re in a good position where we kind of control our profitability,” Joe McDonald, co-founder and CEO of Tem, told TechCrunch. “So I could have chosen not to raise money at all and have a beautiful, beautiful business in some ways.” “Well, we’re not that kind of business. We know what we want to achieve as someone who has wanted to go public over the years.”

Tem is a classic market game, matching electricity generators with consumers. The company began deliberately focusing almost exclusively on renewable energy generators and small businesses to fill both sides of the ledger. “The more decentralized and distributed, the better for the algorithms,” MacDonald said. “But it only works until it reaches the enterprise level.”

The company’s clients include fast fashion retailer Boohoo Group, soft drinks company Fever-Tree and Newcastle United FC.

Tim currently runs what amounts to two different businesses. One, called ROSU, is a transaction engine that connects suppliers and buyers. Here, machine learning algorithms and LLMs help predict supply and demand.

MacDonald said the goal with Rousseau is to reduce costs by removing several layers that exist in current energy markets. “In each of them, you have different teams doing different jobs, getting different levels of profits from back office to trading, from trading desks to other trading desks, and maybe five to six brokers in total enabling the flow of money to move from one side to the other,” he said.

With AI, “you now have the opportunity to replace humans, labor costs, and disparate systems in a single transaction infrastructure,” he said. The goal is to bring the price customers pay for electricity closer to the wholesale cost.

The other part of Tem, called RED, is a “new utility” designed to prove Rosso’s value.

“When we first started, we tried to sell our infrastructure to energy companies, and we got nowhere,” he said. RED is currently the only tool using Rosso, and McDonald said its growth has led the company to prioritize it over opening Rosso to others.

However, at some point, Tim plans to let other facilities in.

“Actually, it doesn’t matter how good it is [RED] He is; Its market share will not exceed 40%. This should not be done, because that becomes a monopoly in itself. “So, I would rather have access to all transaction flows,” MacDonald said.

“In the long term, we don’t really mind who owns the customer, who owns the generation as long as our infrastructure is in use,” he said. “This is just infrastructure in the same way that AWS or Stripe was.”