David vs Goliath: How one start-up is using AI and Machine Learning to take on energy industry giants

The energy industry is ripe for disruption. It’s been dominated by ‘Big Energy’ conglomerates for far too long, but a new player has entered the arena and they are ready to shake things up.

tem. Energy is an AI-powered platform that (for the first time) provides businesses with an alternative to securing energy from fossil-fuel driven wholesale markets, which are run by Big Energy. The UK start-up has built a platform which provides businesses with an affordable, traceable, and direct way of buying renewable energy. I love tem.’s mission of creating a world where SME’s can access the renewable energy they need, forever, so I decided to invest in the company.

I sat down with tem.’s co-founder and CEO, Joe McDonald, and Terese Hougaard from Atomico (who led tem.’s £10.5m Series A funding round in 2024), to better understand how tem. is shaking up the industry for good. It was a fascinating conversation, where you’ll learn about using AI for good, how to disrupt monopolised markets, and how a purpose-driven business can drive both emissions and costs down at the same time.

I’m always intrigued by a start-up’s origin story. What drove someone (or a team of people) to quit their careers and dive into the great unknown? Most successful start-ups are driven by an unshakeable understanding that things could be done better – whether that’s for customers, communities, the planet, or all the above. This is precisely how tem. got started. Joe had been working in energy for many years, and he knew the industry’s acute pain points all too well. The final straw came on one evening during the Energy Crisis of 2021-2023. As he told me:

“I always bring this back to a very specific story that happened in a week in 2022. I was sitting down with my friend. She had been running a catering business for seven years, dropped out of uni, started her catering business, it did really well, and then she just broke down to me one evening because she was having to shut it down. Energy bills were going up by 500% in three months. On the Thursday of the same week, I went out for dinner with one of my friends who's a trader at an energy trading company. He had just been paid over £800,000 for his bonus that year. It was that absolute real impact that I felt in front of me that was like, we have to do something about this.”

Given that Big Energy companies make more than £300 billion in profit every year from inefficient transactions, Joe was right. The wholesale market is characterised by a complex value chain made up of brokers, traders, utilities, OTC desks who each capture significant margin that pushes the end customer price up. But how do you face up against a big player in an entrenched industry? tem. have worked hard not to antagonise the players. As Terese explained:

They are in discussions with different parts of the value chain. They work very closely with energy brokers, for example. And so, they are able to navigate that radical innovation in a way that actually brings people and stakeholders with them, rather than creating a feeling of antagonism, which I think is really important.

Joe also mentioned that it’s vital to build a product that required little behavioural change but serviced the customers much better. As he said: “We really heavily indexed on little behavioural change for a better experience. What that means is you end up having to build a really, really complicated platform, which took a lot of time to actually think through and work. But if we build a better product, you will solve both planet problems and the customers problems that that they're facing every day.” Well said – and a good reminder for all.

To date – tem. has helped hundreds of businesses save more than £4 million in energy transactions, and they are just getting started. It’s a fascinating case of David and Goliath, and I can’t wait to see what they achieve next.

Learn more about tem.’s Renewable Energy Direct platform right here.