Fuse Energy enables one thing in plain terms: cheaper electricity bills by owning more of the value chain, from building and operating renewables to trading power and selling tariffs to households.
The UK company has raised EUR 66.5 million in funding from Balderton Capital and Lowercarbon Capital, according to a recently announced round. The deal stands out as an against-trend bet: venture investors backing a business that is deliberately asset-heavy in a market where most software-minded energy plays try hard to stay capital-light.
What’s been built so far
Fuse Energy was founded in 2022 by ex-Revolut executives Alan Chang and Charles Orr. It initially operated in stealth under the name Tesseract before rebranding to Fuse Energy.
Unlike many retail suppliers that are essentially billing engines with wholesale exposure, Fuse has been assembling pieces of physical infrastructure and market access. Verified reports indicate it made a string of UK acquisitions including Paddington Power (a licensed electricity supplier) and later a Scottish wind farm plus solar farms in England.
The company describes itself as a vertically integrated “full-stack” renewable energy player: site construction and ownership, power generation, trading, supply, installations and hardware. The stated goal is to strip out inefficiencies and offer electricity at around 10% lower prices. Consumer-facing propositions include tariffs pitched at saving households up to GBP 200 per year and an “Energy Network” product designed to reward off-peak usage, with a public rollout slated for January 2026.
Why this round is a little counterintuitive
Energy retail is not typically where venture investors go to feel relaxed. UK supply has a recent history of failures driven by wholesale price volatility, thin margins, hedging mistakes and regulatory constraints.
Fuse’s answer is integration: if you own generation and can trade around it, you are less dependent on buying power at the wrong time and reselling it at fixed or capped rates. That is the theory, and it is also where execution risk lives.
The funding also lands in a period when many investors prefer software-like gross margins and short payback cycles. Building and buying renewables assets, plus potentially financing installations and hardware, pushes the business toward longer lead times, permitting and grid connection queues. In other words: more of the problems energy incumbents already have, just with newer branding.
(If there is a single dry joke to make here, it is that “full-stack” in energy often means “full waiting list” for interconnection.)
The real bottlenecks: not demand, but delivery
Fuse’s pitch to reduce bills hinges less on customer acquisition and more on operational constraints that sit outside most fintech playbooks:
- Permitting and planning: New renewable sites and repowering can be slowed by local planning decisions and environmental constraints.
- Grid connections: Interconnection timelines can dominate project schedules, especially as UK queues lengthen.
- Construction capacity and equipment lead times: EPC availability, transformer delivery and balance-of-plant constraints can be the difference between a model that works on paper and one that misses seasons.
- Trading and risk management: Integration only helps if the hedging strategy and trading systems can manage shape risk, imbalance exposure and regulatory requirements.
- Regulatory mechanics: Retail pricing and consumer protections limit how quickly suppliers can pass through costs. Any “10% cheaper” promise depends on how margins, hedges and supply obligations are structured.
What to watch next
Fuse has already attracted notable backers in prior rounds, including Balderton and Lowercarbon, and has raised significant capital since being founded in 2022. Verified reporting also notes a later 2025 raise of EUR 59 million led by the same two investors, with participation from a broad syndicate of VCs, at a reported valuation of EUR 4.2 billion. MidMarketNow cannot reconcile those figures with this EUR 66.5 million announcement based solely on the provided source and facts, so the clean takeaway is simpler: investors are continuing to fund the thesis that a consumer energy supplier can be rebuilt around owned generation and software-driven demand shaping.
The key near-term proof points are operational: whether Fuse can bring additional generation online on schedule, secure grid connections, and demonstrate that its customer proposition (lower bills plus off-peak incentives) reduces peak procurement costs without creating new liabilities.
What would make this work
- Fuse consistently secures grid connections and delivers projects on time, turning “vertical integration” into actual delivered megawatt-hours.
- Trading and hedging capabilities mature fast enough to handle volatility while scaling the retail book.
- The off-peak incentives shift load meaningfully, reducing peak exposure and imbalance costs.
- Customer acquisition costs stay rational relative to the margin available in retail supply.
What could break it
- Interconnection delays or permitting setbacks stall generation growth, leaving Fuse exposed to wholesale markets like any other supplier.
- A volatility event stress-tests hedging and liquidity, forcing retrenchment or dilutive financing.
- Hardware and installation ambitions inflate working capital needs faster than funding can support.
- Regulatory changes tighten supplier economics or constrain tariff structures, squeezing the “cheaper power” promise.