The raise comes as strain on the European energy system intensifies. In the UK alone, £2.7 billion was spent balancing the grid in 2024/25 – driven by a growing mismatch between supply and demand, as renewable generation increasingly exceeds what the system can absorb in real time. The result is a costly paradox: large volumes of low-carbon electricity are curtailed, even as system costs rise. At the same time, industry faces mounting pressure to secure reliable, affordable energy while reducing emissions.

Industrial heat represents a significant share of global energy demand and emissions, yet remains structurally difficult to decarbonise due to its requirement for high, continuous temperatures across a wide range of processes. Simultaneously, increasing volumes of renewable electricity are curtailed as the system struggles to absorb generation in real time.

Founded as a University of Edinburgh spinout, Exergy3 is built to address this mismatch. Its technology converts surplus renewable electricity – such as curtailed wind power – into high-temperature heat for industrial use, turning excess generation into a usable energy source rather than wasted supply.

Markus Rondé, CEO of Exergy3, said: “These are two sides of the same problem. Industry needs reliable, high-temperature heat, while large amounts of renewable electricity are going to waste. Exergy3 brings them together – turning surplus renewable power into reliable, low-cost heat for industry. That means lower emissions, lower energy costs, and a more resilient energy system. This funding allows us to move rapidly from pilot to commercial deployment.

The seed round was led by Axeleo Capital, whose Article 9 Green Tech Industry I fund backs deeptech startups aiming to reduce the environmental impact of industrial processes across Europe. Axeleo Capital was joined by Bavaria-based public venture capital investor Bayern Kapital and Singapore-based Kibo Invest, whose climate tech fund supports companies transforming industries and addressing urgent climate challenges.

Existing investors Scottish Enterprise, Zero Carbon Capital and Old College Capital, the University of Edinburgh’s in-house venture investment fund, also participated in the round.

Guillaume Sarlat, Venture Partner, Axeleo Capital, added: “Decarbonising heavy industry – accounting for over 20% of global energy consumption and still largely fossil-based – is arguably one of today’s most compelling climate hardware venture capital opportunities in Europe. Exergy3 uniquely leverages curtailed and negative-priced renewable electricity, storing it at ultra-high temperatures to deliver low-cost, zero-carbon heat to industrial customers.

Convinced by the Exergy3 team’s deep technological expertise and exceptional execution capabilities, we at AXC Greentech Industry are proud to lead this £10 million seed round in support of their commercial rollout.”

The funding marks a pivotal step in Exergy3’s transition from demonstration to scale, following the successful delivery of its first-of-a-kind system and validation of the technology in real-world conditions. The capital will accelerate this next phase, scaling manufacturing capacity, expanding the team, and enabling broad deployment across industrial sites. Exergy3 plans to double its headcount by the end of the year. It will also open a Munich office later this quarter as part of its expansion into Germany, establishing a strong European presence to capture growing demand across key industrial markets.

Monika Steger, managing director of Bayern Kapital, commented: “The decarbonisation of industrial process heat is a key lever for the transformation of energy-intensive industries and at the same time a highly relevant growth market for climate tech in Europe. Exergy3 is developing a technologically promising solution at the intersection of energy, industry, and decarbonisation. As a VC investor, we see significant commercial potential here. The fact that Exergy3 intends to further develop its technological potential from Munich in the future also underlines Bavaria’s attractiveness as a location for industrial innovation.”

As Exergy3 moves into commercial deployment, its system is designed for rapid integration across industrial environments. The modular thermal energy storage units convert renewable electricity into high-temperature heat, delivering process temperatures from 50°C to 1,200°C while remaining compact and easy to install with minimal infrastructure requirements. This flexibility allows the technology to adapt to a wide range of industrial processes, from direct heat applications to steam generation, making it broadly applicable across energy-intensive industries.

By turning excess renewable generation into a reliable energy input for industry, Exergy3 is opening a new pathway for decarbonising heat at scale. As the company moves into commercial deployment, its technology is positioned to strengthen energy security, improve overall system efficiency, and unlock new value from existing infrastructure – addressing some of the energy transition’s most persistent and complex challenges.