Backed by Lightspeed, the four-year-old startup is expanding into the U.S. to launch its AI-powered Red system that cuts business electricity costs by up to 30%.

The energy technology company Tem, based in London, has raised $75 million in new funding as it seeks to grow globally and expedite the launch of its AI-powered platform that can reduce business electricity costs by up to 30%.

Lightspeed Venture Partners led the investment round, which is thought to have valued the four-year-old business at around 300 million dollars. Tem intends to expand its operations in the US and advance its technology with the help of the funding.

Tem, a 2021 startup, has developed a platform it calls "Red," a neo-utility that matches electricity supply and demand directly through AI, eschewing the wholesale market and its numerous middlemen.

According to Joe McDonald, co-founder and CEO of Tem, it is to eliminate what he called needless "middlemen" from the energy system. They estimate that 'Big Energy' takes out around $1 trillion in transaction fees annually. Also, the objective is to reduce the transaction cost to zero.

Approximately two thousand sixty companies, such as Boohoo and Fever-Tree, are already using Tem's software to save their electricity expenses. Red claims to have reduced consumers' energy costs by $35 million since its inception in November 2024. According to Tem, two schools have also joined, one of which is saving £55,000 annually.

McDonald stated the disruption was unavoidable due to the current system's inefficiencies. Over the next decade, he doesn’t see why infrastructure like they won't be used for every single electricity transaction. The antiquated procedure that 99 percent of transactions currently rely on is far too inefficient.

A group of energy experts, including McDonald, Bartlomiej Szostek, Ross Mackay, and Jason Stocks, formed Tem. Hitachi Ventures and Atomico are among the current investors, and the most recent raise brings the total funding to $94 million.

According to McDonald, Red was introduced in part to show off the capabilities of Tem's technology. To lower their cost per transaction, the company intends to license its platform to utilities worldwide in the long run. Tem has refused to identify the two utilities that are currently running the software.