UK-based entech unicorn Octopus Energy announced on Monday that it has struck a “major strategic partnership” with Generation Investment Management, an investment fund co-founded by the former US Vice President Al Gore. The fund focuses on sustainability and combating climate change.
As part of the deal, Octopus Energy Group will receive $600M (nearly €513.5M) of additional investment from Generation Investment Management, pushing the entech’s valuation to almost $4.6B (nearly €3.94B).
“The deal consists of $300M immediate investment, with $300 million to follow by June 2022 subject to certain further funding conditions,” says the company.
In December 2020, Octopus Energy Group was valued at over $2B (approx €1.7B) after closing its second investment round of the year led by international energy companies Tokyo Gas and Origin Energy.
The new agreement will see Generation’s Long-term Equity strategy take a stake of approximately 13 per cent in the business, alongside an approximate $55M equity investment from Origin Energy. According to Octopus, it will use the proceeds “to turbo-boost its mission to drive the renewable revolution globally.”
The capital will also be used to enhance Octopus’s smart grid capability so that it can support 100 million energy accounts on Kraken by 2027. Kraken is the company’s technology platform that currently manages 17 million energy accounts globally. This is done through Octopus’s own retail businesses in the UK, USA, Germany, Spain and New Zealand, plus licensing agreements with Good Energy, Hanwha Corporation, Origin Energy, nPower and E.ON.
“Three years ago, the management team of Octopus Energy met to discuss growth plans for our fledgling company. We watched An Inconvenient Sequel and were inspired to accelerate and expand our mission to make energy greener faster, cheaper, across the globe. Being backed by Generation, co-founded and chaired by Al Gore, enables us to make that dream come true,” says Greg Jackson, Founder and CEO, Octopus Energy.
UK energy market in peril
The UK energy market has been facing a tough time as surging gas prices have pushed several small UK energy suppliers to shut down. Recently, Octopus Energy took over some customers of Avro energy – a British energy supplier that recently stopped trading.
Britain’s independent energy regulator, Ofgam appointed Octopus Energy to take on supplying Avro Energy’s approximately 580,000 domestic customers. This follows a competitive process run by Ofgem to get the best deal possible for customers.
As of September 24, 2021, Octopus Energy had 2.5 million customers. The company’s customer base grew to 3.1 million after taking on Avro Energy’s 600,000 customers on 25 September 2021.
“Whilst the UK energy market is currently in a tough state, it has highlighted the need for investment in renewables and technologies to end our reliance on fossil fuels. So we are delighted to announce our agreement with Generation Investment Management, created to back sustainable companies changing the world for the better,” says Jackson.
About Octopus
Octopus Energy Group (OEG) was launched in 2016 by co-founders Greg Jackson, James Eddison, and Stuart Jackson. The company claims to use the latest technology to enable the delivery of green energy and transform customer experiences.
It is part of Octopus Group, which is a certified BCorp. The company’s domestic energy arm serves its customers with cheaper and greener power through Octopus Energy, M&S Energy, Affect Energy, Ebico, London Power and Co-op Energy.
