UK startup Octopus Energy becomes renewable energy giant in GBP3bn deal
The UK’s fastest growing energy supplier will soon become one of Europe’s biggest renewable energy investors in a deal worth more than GBP3bn, which could bring green energy to 50 million homes in six years.
Octopus Energy will snap up its sister company Octopus Renewables in a move that will hand the startup a portfolio of about 300 renewable energy projects, across six different countries, enough to power more than 1.2 million homes.
The fast-growing energy supplier hopes to grow its international business to create 50 million Octopus Energy customers by 2027, and plans to increase its new renewables division to generate as much clean electricity as it sells.
Octopus Energy last year achieved double “unicorn status” – a term used to describe young startup companies worth at least $1bn -after investors valued the company at more than $2bn, just five years after it began supplying gas and electricity.
Greg Jackson, the founder and chief executive of Octopus Energy, said the deal would create a business that was “unrivalled on the global stage” by combining the supplier’s unique technology platform with the investment expertise of Octopus Renewables. He said the deal could “change the entire energy lifecycle, make every green electron matter, and deliver the green energy transition faster and cheaper for everyone”.
Jackson, who owns a 7.4% stake in Octopus Energy, amassed a paper fortune of an estimated $155m (GBP115m) after the company’s GBP2bn valuation last year, making him one of the most successful green energy entrepreneurs in UK corporate history.
Chris Hulatt, the co-founder of Octopus Group, which owns both companies, said there was “a huge opportunity” to “unleash pent-up capital that can help deliver the green energy transition faster than anyone ever imagined”.
Octopus Renewables was founded 21 years ago and owns a string of wind and solar projects in the UK, including several rooftop solar assets in Manchester and Birmingham and windfarms in South Lanarkshire and Northamptonshire. Earlier this month Nest, the UK’s largest workplace pension scheme, which manages pensions for more than 10 million employees, chose Octopus Renewables to help invest an initial sum of GBP250m directly into onshore wind and solar energy projects after divesting from fossil fuels.
Octopus Energy’s ambition to increase its customer base to 50 million homes globally, includes a plan to reach another 50 million homes through its bespoke software platform which it leases to other suppliers to help run their energy supply businesses.
Octopus has struck deals with big utility companies in Australia and Japan to use the “elect-tech” software, which uses bespoke algorithms to make it easier to offer customers “smart” renewable energy tariffs that can integrate home batteries and electric vehicles to make using renewable power cheaper.
The technology platform is already used in 17 million homes, including customers of E.ON and Good Energy which lease the technology to run their own businesses. Octopus Energy has also made inroads into the German and US markets.