How Alan Chang and Fuse Energy reached a $5 billion valuation in three years

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In February 2022, a company no one had heard of bought a dormant electricity supply licence from a firm called Paddington Power. That July it bought a single 0.8 MW wind turbine in Scotland, and within three and a half years, the same company was valued at $5 billion. This is the story of Fuse Energy, and how its founder Alan Chang, built one of the fastest growing companies in the UK. 

Fuse Energy launched in July 2023. It turned over roughly $2 million in its first year. In its second, $20 million. In its third, $400 million. It won a gas supply licence in November 2024, entered the gas market in July 2025 with around 50,000 homes on supply, and by that December had roughly 200,000 customers. That same month Balderton, Lowercarbon and QuantumLight put in $70 million at a $5 billion valuation.

In January the Sunday Times 100 ranked it first in its tech hardware category on 484% three-year sales growth. By June it was serving more than 300,000 households at a $550 million run rate, hiring 380 people and taking a 32,000 square foot office in Canary Wharf.

For scale, Centrica, which owns British Gas, turns over £19.5 billion a year and is worth about £8 billion on the stock market, priced at just 0.4 times its sales. Fuse was valued at 12.5 times its revenue.

In this edition we look at how that was achieved, what the $5 billion is priced on, and how Europe became the world leader this year in funding for energy-focused startups.

The collapse in the market that Fuse was born from

Between June 2021 and mid-2022, 28 UK energy suppliers failed. The National Audit Office put the cost to consumers at £2.7 billion, roughly £94 on every household bill in the country, with 2.4 million customers moved through the Supplier of Last Resort process and 1.6 million more absorbed when Bulb collapsed. The NAO's verdict on Ofgem was blunt: a "low bar" licensing regime that let financially weak suppliers in without proper scrutiny of their balance sheets, and a price cap never tested against a sustained wholesale shock.

It was among the ashes of an industry-wide collapse that Fuse was built the way it was. A pure retail supplier owns nothing. It buys wholesale, sells retail, and keeps the difference and in the UK that difference was capped by the regulator.

What survived were the big suppliers who also owned power stations and could set one side against the other, and Octopus, which had scale, disciplined hedging and a software arm now worth more than the supply business attached to it. That left an unusual opening: no new entrants, licences and distressed assets going cheap, and a clear lesson about which structure survives in the market.

The Tesseract years

Fuse began in early 2022 as Tesseract, founded by Alan Chang, Revolut's former chief revenue officer and one of its first three hires, and Charles Orr, an early Revolut strategy hire.

The company bought Paddington Power's electricity supply licence in February 2022 and a 0.8 MW Scottish wind turbine that July, both before Balderton and Lakestar led a $78 million round in September at a $145 million valuation. Balderton described what it was funding as "a new, vertically-integrated energy company".

The original plan was to sell tokens representing output from the company's own solar farms, which households would hold as a "virtual renewable power station" and set against their consumption. That model was quickly moved on from that to one that targeted building a full-stack energy supplier, from creation to a customer-facing supply and distribution system. 

The Revolut playbook

Chang is explicit that the method is imported from Revolut, where he worked alongside Nik Storonsky as the company scaled to one of the world’s most valuable FinTechs. He cites Storonsky's "never settle" line directly, and his own version is that "if you're not number one, that's not good enough". On the industry he entered, his verdict is that "the whole energy industry in the UK has been asleep at the wheel".

In practice that means ten or more software releases a day, and Chang has been unambiguous about what that asks of staff, saying you need to work weekends to win and dismisses the need for a work-life balance. 

It also means removing operational weight, such as call centres, with an app-first chat and email around the clock. 

QuantumLight, Storonsky's own VC fund, joined the December round alongside Balderton and Lowercarbon. The speed of Fuse Energy’s growth and hiring plans is not dissimilar to the speed and execution Revolut was similarly known for. 

Owning the whole value chain

The reason Fuse survived where others didn't is that it doesn't only sell electricity. It builds and buys renewable sites and sells the output to its own customers, most recently the 20 MW solar farm bought from a Welsh County Council. About 42 MW is running today against a stated 1 GW pipeline, built at roughly 30% below industry averages per unit of capacity, the company says, though planning and grid connection add around two years before construction starts.

On top of that sits the trading operation, with in-house forecasting that models each customer's home in detail, taking in weather, building efficiency and live usage, which Fuse says buys it about 17% more efficiency than a conventional supplier's hedging. The output of all of it is a tariff roughly 10% below the incumbents, or £150 to £200 a year against an October price cap of £1,723.

Chang calls the combination "Tesla Energy plus Shell, with AI at the core", while Balderton's James Wise puts it as owning the chain so it "passes the margin straight back to customers". Margin taken at generation and trading funds a retail price the pure-plays can't match, which buys growth, which pays for more generation. 

How Fuse got to a $5 billion valuation

At nine to twelve times revenue, Fuse is not being valued as a traditional market supplier, where public comparables are currently trading at a fraction of sales. It is priced as an owner of physical assets with a software business attached, on the 1 GW pipeline rather than the 42 MW running today. There is precedent for that. Kraken, Octopus's software arm, was spun out in January at a reported $8.65 billion, with the British Business Bank writing its largest-ever direct cheque of £25 million into the round, there’s some direct parallels with Fuse.

The mechanics of the round are interesting too. The $5 billion was set by a $70 million round, or just 1.4% of the equity, among investors who had backed the company since 2022, and the $30 million extension in June. 

The market Fuse is building into

The business model that Fuse has built is that earns twice on the same unit of energy. It makes a margin generating the power and a second one selling it, and it hands part of the combined total back to the customer as a cheaper tariff. That only works if two things stay true. 

Building solar has to stay cheap, and the power those sites produce has to be worth something at the moment they produce it, because a solar farm generates at midday, which is when every other solar farm is generating output, meaning the value in pricing is obtained when you have storage capacity to capture peak output and sell at peak prices.

On the surface the picture is excellent. 2025 set records everywhere: global solar additions came in between Ember's 647 GW and SolarPower Europe's 664 GW, output rose 30% to 2,778 TWh, and renewables passed coal worldwide for the first time in the modern era. In Europe, wind and solar together reached 30% of electricity, ahead of fossil fuels for the first time on record, and Britain cleared 4.9 GW of solar at £65/MWh in its latest auction against wholesale prices above £80.

On the contrary, building got more expensive rather than cheaper, with panel prices up more than 30% this year after Chinese capacity cuts and 2026 on course for the first annual fall in global installations in roughly twenty years, as SolarPower Europe forecasts 612 GW, down 8%. The midday problem is arriving faster still. Hours of negative prices across the EU more than doubled to 1,223 in the first quarter alone, and Spain, which had none at all a year earlier, accounted for 347 of them.

What rescues both conditions is batteries. In 2016 the world added 1 MW of storage for every 56 MW of solar; in 2025 it added 1 MW for every 6. Storage is what turns midday power worth nothing into power you can sell at six in the evening. It is also why Fuse's 1 GW pipeline is worth considerably more paired with batteries than on its own, and what the company means when it talks about making money from negative prices by shifting when its customers draw power.

Where European energy money went in 2026

Europe led global climate tech investment for the first time in the first quarter of this year, at $6.6 billion, nearly half the global total, but across only 191 rounds, with the three largest deals making up 56.4% of the quarter's value. The biggest headline numbers aren't typical venture rounds either. Cloover's $1.2 billion is a debt facility with $22 million of equity attached, GIGA Storage's €450 million is project finance for a Belgian battery, and GreenWay's €138 million is debt for EV charging. Debt makes sense in this context for capital expenditure on large projects where cost of capital needs to be kept low for the duration of the development.

On equity, fusion took the largest investments by some distance. Munich's Proxima Fusion raised €411 million in July at a €2.4 billion valuation, the largest European fusion round on record, with RWE and Google both participating in what was Google's first European fusion investment. Darmstadt's Focused Energy took $240 million in May led by RWE, the largest Series A in the history of the industry globally. Outside fusion, the standout was Kraken, while in Cambridge, Nyobolt raised $60 million at a $1 billion valuation led by the US robotics group Symbotic, making it a new British unicorn on the back of ultrafast-charging battery technology spun out of the university.

The more interesting pattern sits beneath the headline numbers. By count rather than size, the sector is dominated by companies selling software that balances grids, pools home batteries and trades power. Tem Energy raised £55 million led by Lightspeed for a platform that automates business electricity contracts, Munich's Entrix took €43 million with 3 GW already contracted across five markets, and London's Axle Energy raised €21 million led by Energize Capital for turning EV chargers and heat pumps into grid capacity. 

Where hardware did raise, it was the long-duration kind, with Amsterdam's Ore Energy taking €37.3 million for iron-air batteries that store power for up to 100 hours. Retail supply, meanwhile, is close to absent, and corporates are leading rounds rather than following them, with RWE, Google, Octopus, Symbotic and Centrica all setting terms rather than tagging along.

With AI getting all of the headlines, it’s worth noting there’s real progress being made on the energy front, and Europe is playing a major role in pushing it forward. A message that often gets lost in the analysis on socials. 

What to take from this

Ultimately, Fuse Energy’s meteoric rise serves as a definitive case study in applying relentless, software-driven execution to a stagnant, regulated industry. By flipping the traditional challenger playbook, securing physical generation capabilities before chasing retail scale, Chang and his team have capitalised on the systemic vulnerabilities of legacy suppliers. 

Its $5 billion valuation is fundamentally a forward-looking premium. It is valued not as a traditional utility on its current market share, but as an infrastructure and technology hybrid priced on a massive pipeline of energy creation and the AI-driven systems required to manage it. 

As the broader European energy sector pivots toward the critical challenge of storage and load shifting, Fuse’s long-term viability will depend on its ability to turn midday solar into peak-hour value. The wider lesson for the market is clear: the next era of energy disruption will not be won simply by generating power, but by mastering the technology stack that it is built on.

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Mark
Shuttle’s Head of UK Expansion & Operations