Exergy3, a clean heat technology startup, has raised £10 million in a seed round led by Axeleo Capital, with participation from Bayern Kapital, Kibo Invest, Scottish Enterprise, Zero Carbon Capital and Old College Capital. It is scaling proprietary technology designed to address industrial decarbonisation, grid balancing and energy security.
The business focuses on the mismatch between surplus renewable electricity and industrial demand for high-temperature heat. Its technology converts excess renewable electricity, including curtailed wind power, into high-temperature heat for industrial use, turning unused generation into a usable energy source. Industrial heat accounts for a significant share of global energy demand and emissions, yet remains difficult to decarbonise due to the need for high, continuous temperatures across processes.
The funding marks a transition from demonstration to scale following delivery of its first-of-a-kind system and validation in real-world conditions. Capital will be used to scale manufacturing capacity, expand the team, and enable broader deployment across industrial sites. Exergy3 plans to double its headcount by the end of the year and open a Munich office as part of its expansion into Germany.
The wider energy system context highlights the challenge the technology addresses. In the UK alone, £2.7 billion was spent balancing the grid in 2024/25 due to a mismatch between supply and demand, as renewable generation exceeds what the system can absorb in real time. This results in large volumes of low-carbon electricity being curtailed while system costs increase.
The system converts renewable electricity into thermal energy stored at ultra-high temperatures and delivers process heat between 50°C and 1,200°C. Designed for rapid integration, the modular units are compact, require minimal infrastructure and can be deployed across a wide range of industrial applications, including direct heat and steam generation.
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.
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 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.
