Tesseract, the energy startup headed up by Revolut’s former chief revenue officer Alan Chang, has quietly made several acquisitions ahead of the scheduled launch of its first consumer product next month.
When it announced its mammoth $78m seed round last year, Tesseract trumpeted a plan to buy and build renewable energy assets and then sell energy directly to consumers far cheaper than regular utility firms. The four acquisitions that it's has made in the past five months are all companies that would enable it to supply power to consumers and cut out traditional suppliers.
The acquisitions include Paddington Power, an almost 10-year-old company per Companies House records. The firm is licensed as an electricity supplier with UK energy regulator Ofgem.
Despite declining to share the terms of the deal, Chang confirmed to Sifted that its motivation was to secure Paddington's license — Tesseract is now able to supply electricity to any premises in the UK. That’s a huge boost for an energy app gearing up for a tentative public debut.
Tesseract has also made good on its plans to buy up renewable energy sources across the country. The Accel and Balderton-backed startup also acquired the Balnamoon wind farm in Scotland in addition to two solar farms in the south of England.
Discovering the energy industry
Chang and his cofounder Charles Orr, previously strategy lead at Revolut, have been quietly putting in the work on their "cut out the middleman" approach to supplying energy, says Chang.
In the process, he says, he’s learnt a lot about the energy industry, a sector in which he had no previous experience.
“We’ve discovered a lot about the [energy] industry,” he says. “And there’s a lot more problems than we originally thought.”
In particular, he cited the millions of smart meters that don’t function as intended despite a government push for their installation. Last June, The Guardian noted government figures indicating that 3.6m smart meter households are currently unable to adequately monitor energy usage.
Alongside the acquisitions of Paddington Power and other energy assets, the firm is operating a stealth B2B side hustle. For the past few months, it’s installed EV chargers and rooftop solar panels for small and medium-sized businesses (SMEs). So far, it’s targeted warehouses and storage centres as clients.
Still, its crown jewel will be its forthcoming consumer app, the details of which Chang chose to mostly keep quiet about for now.
Chang has previously spoken about his plan to "tokenise" energy.
At the time, he described Tesseract as a “virtual renewable power station” from which users could buy energy directly from solar panels and other renewable energy sources via tokens. Theoretically, this would enable users to buy and hold crypto tokens on the Ethereum blockchain that equate to a certain amount of energy to offset energy bills.
For now, it’s pushing its blockchain ambitions to next year. While there were previous plans to seek regulatory status in the British Virgin Islands, Chang says that the firm is currently prepping for regulatory applications in its native UK. It’s recruiting for a crypto-focused money laundering reporting officer.
Despite holding off on its Web3 plans, Tesseract is hardly resting on its laurels. While other climate techs teeter on the edge of survival, Chang is already eyeing a trip to mainland Europe. It’s currently hiring for both Spanish and German-speaking operators.
We hired mostly to upgrade the team
“I will say that it’s in anticipation of future expansion,” Chang says. “So basically, the thinking is we’ll hire someone who can speak those languages now who’ll work on the UK market for launch and then we can send them to Germany or Spain when we expand to those markets.”
Currently, its team stands around 25 — recent hires are a mix of tech veterans and former energy industry execs.
Former GoPuff director Felix Jamestin oversees product and in January, the startup nabbed Revolut’s head of global talent Renalda Xhikola to oversee its people operations. Last year it added a head of solar and a head of trading power from energy stalwarts Voltalia and EDF Energy, respectively.
While the firm is currently hiring for around eight roles, Chang says that he doesn’t expect Tesseract to grow fast in terms of headcount.
“We hired mostly to upgrade the team but otherwise we’ve been pretty flat in headcount,” he said.