Prospectus
What is Tree(3)?
Tree(3) is an energy company with a simple goal: price any energy contract, anywhere in the global commodities markets. To accomplish this, we are building the industry's most quantitative commodities valuation platform.
At Tree(3) we peer into the future with a digital twin of the global energy system: a first-principles simulator of energy supply, demand, and flow that models the state of the world with unprecedented spatial and temporal granularity, from the present moment out several years. We model the fundamental physics of energy, the market structures that regulate its production and exchange, and the incentives that drive the behaviors of market participants.
We monetize our views by trading financial derivatives of energy with an emphasis on electricity and natural gas futures. In our second phase of growth, Tree(3) will make targeted, strategic investments in physical assets and infrastructure that leverage our differentiated view of bottlenecks in the global energy network. Our vision is for Tree(3) to become an industry-leading energy business with a presence in every major commodity market.
Why now?
A bullish energy supercycle is underway, caused by booming AI power demand in the globe's largest, most mature energy markets. Data center campuses with loads exceeding those of large metro areas are already coming online alongside gigawatts of new supply from solar, batteries, behind-the-meter resources, and gas. Whether this cycle continues or corrects, market dislocations are inevitable.
Energy markets have rarely received more attention, yet they have not become easier to understand. Why? New technologies (batteries, solar, data centers) follow business models and operating strategies fundamentally unlike those of traditional power plants and utilities. Sustained demand growth is a persistent nonstationary perturbation of the energy system's balance and interacts with the evolving supply mix in unexpected ways. The market itself is becoming more complex, with a broader range of participants pursuing increasingly algorithmic strategies.
In an environment changing this rapidly, historical outturns provide limited insight into what happens next. It is not sufficient to assume, as much of the industry does, that next year's market will resemble last year's. Anticipating where and why supply-demand imbalances arise before they materialize calls for a fundamental, integrated view of the energy system, and a team that bridges the physical and digital sides of the energy world.
Our edge
Our edge rests on three pillars. The first is an obsessive focus on collecting, storing, and organizing the vast data of energy markets. We believe that maintaining high-quality, analysis-ready datasets is the key that unlocks persistent edge. We systematically ingest a wide range of public data and complement it with private vendors and our own proprietary datasets. Our physics-informed data assimilation models triangulate across this information landscape to tie disparate sources together. Tree(3)'s datasets are its core IP.
The second pillar is our modeling approach, which is fundamentals-first and statistically calibrated. We have developed an analytical system for modeling the energy system that combines power system modeling, energy economics, time-series forecasting, data processing, machine learning, and weather modeling. Our industry-leading capabilities are not derived from third-party vendors. They are developed entirely in-house, giving us an orthogonal source of edge compared to what is available in the market.
Some differentiating factors in our modeling strategy are worth highlighting:
- The energy system is a coupled techno-economic system. We therefore place equal emphasis on economic models (e.g., regulatory systems, market designs, participant behavior models) and physical models (e.g., power flow, gas pipeline constraints, supply chains). Combining economic understanding with physical laws is essential for maintaining realistic representations of the market's behavior. In isolation, each tells less than half the story.
- We approach the energy system as a coherent whole, as it exists in the real world with its cross-linkages and correlated outcomes. This stands in contrast to an asset-by-asset approach that is prevalent across the industry. Beyond the traded commodities themselves, we simulate the upstream inputs to energy production — raw material pipelines, equipment supply chains — and the downstream drivers of demand like technology adoption trends. Unique opportunities for Tree(3) to hedge exposure to volatility emerge from this perspective.
The third pillar is our approach to risk quantification. Pricing means two things: assessing the expected value of a commodity at a specific time and place, and calibrating a distribution of possibilities around the expected outcome spanning the relevant axes of uncertainty. We adopt a probabilistic perspective throughout our modeling stack, grounding uncertainty distributions in fundamental, physically derived sources. Our thesis is that better world models produce better probability distributions, ones that capture cross-asset correlations and bounds imposed by economic logic or physical constraints, rather than statistically overfitting to what has been seen in the past.
Who are we?
Tree(3)'s founding team brings together a unique range of expertise in energy markets: quantitative trading, power system operation, market design, and machine learning R&D. This combination enables us to translate understanding of the physical energy system into quantitative models for forecasting, valuation, and trading.
We value a small, highly skilled team that applies first-principles reasoning to understanding the market and leverages AI tools to sustain a rapid R&D cycle. Our objective is to be the fastest in the market to comprehend and adapt to structural changes in the global energy system.
The team is currently seeking to add experts in computing, statistics, and meteorology.
Timeline
Tree(3) will launch in March 2027. We expect to enter the markets in summer 2027, starting with trading electricity and associated natural gas futures in PJM and ERCOT. These are the largest, most dynamic energy markets in North America and provide the most immediate opportunity for Tree(3) to leverage its strengths in modeling gas-electricity coupling and power network congestion.
The team is actively building out analytical capabilities in other asset classes (financial transmission rights, global gas, oil) and geographies (other North American markets, European markets, Australian markets).