UK firms developing energy software have raised around £1bn in funding over the past 10 years, with the pace of investment growing significantly in the past few years, according to new research.
In the UK EnergyTech Report from investment group AlbionVC in partnership with data company Beauhurst, the researchers analysed every UK asset-lite energy software company founded since 2016.
What it found was that close to £1bn has been raised by the companies across 483 rounds. Interestingly, the pace of funding has picked up significantly in the years since 2022, with 2025 alone accounting for £260m raised.
The report notes that while recent activity indicates significant opportunity in the sector, driven part by increased demands for efficient energy management, the sector remains at a nascent stage, with generalist investors only just starting to get involved.
The surge in deal activity is being driven by a severe power supply-and-demand mismatch. UK electricity prices remain over 50% above pre-energy crisis levels, higher than every EU nation except Germany, while data centre energy demand from AI is projected by the IEA to nearly double by 2030.
With grid connection queues exceeding 700GW and facing 10 to 15-year wait times, asset-light software is emerging as the fastest route to optimise existing infrastructure, from battery storage to building management.
Between 2023 and 2025, total equity capital raised grew by 34%, driven by breakout scaleups such as green energy supplier Fuse (£137m raised), heat pump installer Noda (£100m), and digital energy marketplace tem (£56m in 2025).
AI applications are taking centre stage, accounting for 46% of all energy software deals in 2025 and 66% of first-time funding rounds. Notable recent AI-focused raises include Gigaton ($26m), Gyre Energy ($1.3m), and HavenWise (£1.04m).
While early-stage funding was historically dominated by specialist energy investors, VCTs, and regional funds, tier-one global venture firms including Atomico, Accel, and Lightspeed have recently begun rotating into the space.
“The cost of the electron will define the next decade for businesses, investors and nations alike,” said Adam Chirkowski, a partner at AlbionVC.
“Energy is one of the largest markets in the world and among the last to be properly digitised. The demand side has tipped as businesses struggle with high energy costs, but the supply side hasn’t.
“For founders with a blend of deep energy and software expertise that are solving infrastructure problems, and investors with the conviction to back them early, that gap is a huge opportunity.”
