The energy industry is at breaking point. While prices in the U.K. are continuing to rise with the new Ofgem price cap set at £3,549, an 80% increase since April, customer ratings for energy companies are the lowest on record. At the same time, fears about climate change are soaring with 72% of people greatly concerned about its effects globally. Yet, a lack of investment in the sector means that issues known for more than 20 years have not been addressed, including the energy industry’s over-reliance on fuel imports and fossil fuels, security of supply and increasing fuel poverty.
Enter UK-based Tesseract which aims to decentralise the right to power by delivering clean, cheap electricity to consumers and help solve climate change. Founded in 2022 by Revolut alumni Alan Chang and Charles Orr, the platform cuts out the middlemen of the energy market by owning renewable generator assets and selling directly to consumers, delivering cheaper bills.
The company claims that instead of installing expensive solar panels, customers can now buy a ‘virtual’ solar panel or wind turbine on the app which could cut their bill by as much as 100% and allow them to capitalise on selling the excess energy.
For doing so, the energy company has raised $78 million in funding to fix the broken energy sector. The funding will allow the startup to buy and build selected renewable energy assets and support the development of its platform.
The round was led by Balderton Capital and Lakestar and witnessed participation from Accel, Creandum, Lowercarbon Capital, Ribbit and BoxGroup, along with angel investors such as Tom Stafford (DST Global), Martin Mignot (Index Ventures), Chris Sacca (Lowercase and Lowercarbon Capital), John Doran and Nico Rosberg (Formula 1 World Champion and sustainability entrepreneur).
By using co-located grid-scale batteries, Tesseract will also be able to effectively manage energy flexibility, creating a more commercially attractive model than competitors.
Alan Chang, co-founder and CEO at Tesseract, said: “We started an energy company because it can solve two of the greatest problems the world faces: rising energy prices and climate change. The energy industry plays a fundamental role in people’s lives yet regularly leaves customers dissatisfied. It is ripe for disruption in the same way as the banking sector was.”
Charles Orr, co-founder and COO at Tesseract, added: “For too long, people have been at the mercy of inefficient energy industry, run by vested interests. Investment in innovation and green energy is minimal and a fig leaf for business as usual. As prices across Europe rise, we are seeing opportunities to challenge this establishment, and we have the technology and vision to take on this industry.”
Colin Hanna, partner at Balderton Capital, added: “As Europe enters a critical phase for energy, and the world urgently confronts a warming planet, brave solutions are required. Tesseract's combination of renewable power and a new model for energy and participation can help us confront these dual challenges without slipping further back into fossil fuels.”
Klaus Hommels, founder and chairman at Lakestar, concluded: “I firmly believe the innovative and exciting business model will revolutionise the energy industry. Lakestar will support the company’s goals of solving climate change and providing cheap electricity to millions.”