Tesseract, a revolutionary new energy company from Revolut alumni, has raised $78 million in funding led by Balderton Capital and Lakestar to fix the broken energy sector. The round also included participation from Accel, Creandum, Lowercarbon Capital, Ribbit and BoxGroup, along with strategic angels 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). The funding will allow Tesseract to buy and build selected renewable energy assets and support the development of the Tesseract platform.
The energy industry is at breaking point – UK prices are continuing to rise with the new Ofgem price cap set at £3,549, a 80% increase since April, whilst 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 innovation and 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.
Tesseract was created to decentralise the right to power by delivering clean, cheap electricity to consumers and help solve climate change. As a vertically-integrated business, the company cuts out the middlemen of the energy market by owning renewable generator assets and selling directly to consumers, delivering significantly cheaper bills. Instead of needing to install expensive solar panels, customers will be able to 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. 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.
From banking app Revolut to taking on the energy industry
The Tesseract team are confident they can upend the energy industry in the same way they disrupted the banking industry at Revolut. Co-founder and CEO Alan Chang was the fintech’s third employee and served as Chief Revenue Officer, whilst co-founder and COO Charles Orr was Revolut’s strategy lead, before spending time as an investor at Mosaic.
Together they have assembled a team of top energy industry veterans to support their mission to change renewable energy forever. This includes Arnaud Luboinski, former head of French Power Trading at EDF; Eduard Uraskulov, former head of M&A at EuroChem and executive at Goldman Sachs; and Dermot Nolan, ex-CEO of UK energy regulator Ofgem who has joined as a board advisor. In addition, several former Revolut team members have joined the team including Felix Jamestin, who launched Revolut Junior; Rory Keohane, creative lead; and Nik Denisenko, lead backend engineer, alongside software engineers from Farfetch, Lyft and IBM.
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. While at Revolut, we saw how ageing incumbents and broken business models held the system back, and how modern technology and an open-minded approach helped consumers worldwide. 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, said: “For too long, people have been at the mercy of an 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, said: “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. Alan and Charles are two iconoclasts who have proven themselves capable of reshaping industries during their time at Revolut. We are humbled to be backing them and the entire team at Tesseract.”
Klaus Hommels, founder and chairman at Lakestar, said: “Alan and Charles are in the top tier of European startup talent, with serious drive and ambition. I firmly believe their innovative and exciting business model will revolutionise the energy industry. Lakestar is very pleased to be backing Tesseract and supporting the company’s goals of solving climate change and providing cheap electricity to millions.”
Dermot Nolan, board advisor at Tesseract and former CEO at Ofgem, said: “Tesseract is a genuinely disruptive force in the UK energy market, underpinned by a sound business model. I’m delighted to be joining as a board advisor as we build a vertically-integrated energy company that consumers will love.”
