Failure Analysis
Bulb died from a catastrophic mismatch between its hedging strategy and wholesale market volatility, compounded by regulatory capital requirements it could not meet. The...
Bulb Energy \UK
Bulb Energy promised to democratize the UK energy market by offering 100% renewable electricity and carbon-neutral gas at competitive prices, wrapped in a radically simple user experience. The psychological hook was powerful: consumers could feel morally virtuous while saving money, all through a slick app that made switching from legacy utilities feel like joining a movement rather than changing suppliers. Bulb tapped into millennial anxiety about climate change and frustration with opaque, customer-hostile incumbents like British Gas and EDF. The brand was aspirational—clean design, transparent pricing, no exit fees—positioning energy as a lifestyle choice rather than a commodity. At its peak with 1.7 million customers, Bulb represented the promise that tech-enabled challengers could disrupt even the most regulated, capital-intensive industries.
Discover the reason behind the shutdown and the market before & today
Market Analysis
The UK energy retail market has undergone violent consolidation since 2021, with 30+ challengers collapsing and the 'Big Six' incumbents regaining dominance alongside Octopus...
Startup Learnings
In commodity-exposed businesses, hedging is not a 'nice-to-have' financial optimization—it is the core product. Bulb treated risk management as a back-office function while focusing...
Market Potential
The UK energy retail market serves 30 million households spending £60 billion annually, with ongoing regulatory pressure to decarbonize creating massive TAM for green...
Difficulty
Energy retail requires navigating Ofgem regulation, managing commodity price risk through complex hedging strategies, and maintaining massive working capital reserves for wholesale purchases. Unlike...
Scalability
Bulb's growth model was fundamentally broken: every new customer increased exposure to wholesale price volatility without corresponding hedging capital. Traditional utilities scale by owning...
Rebuild & monetization strategy: Resurrect the company
Execution Plan
Phase 2
Build a minimal optimization engine that monitors National Grid's Demand Flexibility Service (DFS) signals and automatically curtails non-critical loads during peak events (4-7pm winter weekdays). Prove you can reduce a site's peak demand by 15-20% without impacting operations, generating £5-10K per site per winter in DFS payments.
Phase 3
Create a simple dashboard showing facility managers: (a) real-time energy usage, (b) forecasted grid events, (c) revenue earned from flexibility, (d) carbon savings. The UI must be dead simple—think Nest thermostat, not Bloomberg Terminal. The value prop is 'we make you money while you sleep.'
Phase 4
Once you have 50+ sites generating consistent revenue, approach National Grid ESO and regional DNOs to become an accredited aggregator, which unlocks access to higher-value markets like FFR (Firm Frequency Response) and STOR (Short Term Operating Reserve). This is where the real money is—£20-50K per MW per year versus £5-10K for DFS.
Monetization Strategy
Revenue share model: GridFlex takes 30-40% of all grid services payments earned by the customer's assets, with a minimum £2K/year SaaS fee per site to cover platform costs. For a typical 1MW commercial site, this generates £6-12K/year for GridFlex at scale. The beauty of this model is that it aligns incentives—GridFlex only makes money when customers make money, and the TAM is enormous (UK has 250K+ commercial buildings over 500kW). As the platform matures, introduce premium tiers: (a) Carbon Reporting Module (£500/month for automated Scope 2 emissions tracking), (b) Energy Procurement Advisory (£5K one-time fee to renegotiate supply contracts using flexibility data as leverage), (c) White-label licensing to energy consultants and ESCOs (£50K/year + rev share). Exit strategy: acquisition by Octopus Energy, Centrica, or Schneider Electric, all of whom are desperately building VPP capabilities and would pay 8-12x ARR for a platform with proven commercial traction.
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