When he was working as a quantitative trader in 2024, Amann Shariff dealt with cryptocurrency, which he describes as “single-handedly the most volatile asset at that time to predict.” Quantitative traders leverage mathematical models, statistical analysis, and algorithms to make predictions and inform their trading decisions, and Shariff said he was eventually able to sell the algorithm he used for the crypto market.
All the while, he was also “mesmerized” by the energy industry. With the penetration of renewables and the rapid increase in electricity demand coming from the artificial intelligence boom, energy’s structural volatility was increasing. This made it an attractive sector for someone used to trying to predict the unpredictable.
That’s what led Shariff to found Shatterdome Energy, an AI-powered energy trading platform, which he describes as a “hedge fund focused on U.S. power markets.” The startup emerges from stealth today with $3.5 million in pre-seed funding. The round was led by Crucible Capital with participation from Transpose Platform and Entrepreneurs First — a startup accelerator where Shariff started Shatterdome as part of its Bangalore, India, cohort.
“We operate renewable energy assets — batteries being our M.O. — and manage their dispatch and cycles,” Shariff said in an exclusive interview with Latitude Media about the company. “The price of energy spikes every five minutes in the real-time market in the U.S., and we are predicting these price spikes and discharging energy when it gives the best return on investment on the assets.” At the moment, Shatterdome is targeting front-of-the-meter renewable assets in the wholesale markets in the U.S., with a minimum of nine megawatts and a maximum of two gigawatts.
Unlike the vast majority of companies active in the space of energy storage optimization — such as Stem, Fluence, or FlexPower — Shatterdome does not simply hand over its trading software to the asset owners. Instead, it leases the assets directly, assumes their financial risk, and hedges that risk using tools more commonly found on trading desks and in hedge funds than in energy companies.
It is a fairly novel approach, and one of the main reasons Crucible Capital, which has a capital markets foundation, led the round, said Meltem Demirors, Crucible’s general partner.
“We have a strong view that coupling [infrastructure asset orchestration] with markets — to help asset owners better control some of the volatility and the return profile of that very material long-duration investment they’re making — is the next step for the build out of infrastructure,” Demirors said. “All of the industrial BESS deployments we looked at have a massive financial engineering problem where their return profiles are extremely volatile, especially given some of the extreme grid events that we saw over the last few years.”
Minimum guarantee and profit split
The first thing Shatterdome does when taking over an asset is to get into a contract with its owner. Much like a PPA, this contract includes a “minimum guarantee,” providing the owner with what’s essentially a rent payment for the asset, and a “performance split” on the profits it makes.
The percentage of the profit split will depend on the contract structure, which varies based on an asset’s lifecycle and volatility profile, among other things. Shatterdome plans to use the pre-seed capital to secure letters of credit backed by insurance policies to fund its trading activity and the minimum guarantees it needs to lease the assets. This means the money “never actually leaves the bank,” as Shariff puts it, assuming the company keeps the team small and operational costs low.
While not as long as a PPA, the terms of the contracts that Shatterdome offers can be as long as seven or eight years, to give energy storage developers the long-term revenue horizon they need to get financing. Because banks and institutional investors typically require long-term revenue guarantees to provide credit, developers with an arbitrage revenue model have traditionally struggled to secure it.
Getting comfortable with risk
One reason why Shatterdome feels comfortable assuming the financial risk of these assets — typically risky for a small company with the still-limited backing capital of a start-up at the pre-seed round — is that the company offsets its physical energy positions with financial contracts. If it takes a physical position in ERCOT, for example, it will also hold a virtual contract in PJM that pays out if the ERCOT trade goes wrong.
Another reason is that Shariff is very confident in Shatterdome’s predictions: “In the four months since we’ve been operational, we haven’t been wrong, touch wood,” he said.
Shatterdome has the help of a proprietary LLM, which updates in real time, and takes into consideration a large number of variables, including the price of gas. “One thing we found is that the price of gas directly correlates to the price of energy — but that percentage keeps changing,” Shariff said. “We have to dynamically keep updating it, so we train an LLM to just do that: to find causation and correlation between variables and the price of energy, and constantly adjust the weightings.”
The startup is still in its infancy. So far, the company has operated a 20 MW battery site and moved roughly 200 megawatt-hour of power as “pure virtual,” Shariff said. Shatterdome is also working with an undisclosed public company on a pilot project for 1 GW of storage and 0.5 GW of solar.
Going forward, Shariff hopes to add more solar and wind to its pipeline, which would potentially be simpler to operate and optimize, because they would just require monitoring the real-time market prices and dispatching the assets at the right time to maximize revenue per megawatt. The company also hopes to start buying and owning distressed storage assets — and eventually become an energy provider itself.
