Yahoo Finance Octopus Energy worth £3.3 billion as Al Gore’s Generation invests £437 million
Challenger energy company Octopus is now worth as much as British Gas-owner Centrica after announcing a blockbuster deal to raise $600 million (£437 million) from Al Gore’s climate fund.
Generation Investment Management, the climate friendly investment fund founded by the former US Vice President, has bought a 13% stake in Octopus, valuing the business at up to $4.6 billion (£3.3 billion). The price tag means Gore’s firm values the 6-year-old business at the same level as public market investors value Centrica.
The chunky investment comes as the UK’s energy market faces a price crisis that has put many newer and smaller players out of business. Octopus, which was founded in 2015 and has 3.1 million UK customers, has so far managed to navigate the crisis and recently took on the customers of bust rival Avro Energy.
Talks between Octopus and Generation pre-date the current energy price crunch and a source close to the deal said Al Gore was personally involved in discussions.
“Whilst the UK energy market is currently in a tough state, it’s highlighted the need for investment in renewables and technologies to end our reliance on fossil fuels,” Octopus founder and chief executive Greg Jackson said. “So we are delighted to announce our agreement with Generation Investment Management, created to back sustainable companies changing the world for the better.”
Jackson spun Octopus Energy out of London-based investment firm Octopus in 2015. The company offers green energy as standard and has grown rapidly since inception. Today it serves over 3 million customers globally, with operations in the US, Japan, Germany, Spain, New Zealand and Australia. It has 17 million customers globally and claims to be signing up around 50,000 new customers each month.
“Octopus Energy has an extraordinarily good fit with Generation’s mission of investing over the long term to support system and climate-positive companies,” said Tom Hodges, a partner at Generation. “The world is at the early stages of an unprecedented energy transition which is essential to reach the goals of the Paris Agreement. This can be done in a way that is better for the environment and consumers.
“Octopus and its software platform Kraken are at the forefront of innovation and helping to create the dynamic and flexible renewable energy system needed.”
Octopus’s valuation in the investment round is more than double what investors pegged it at less than a year ago. The company raised money at a $2 billion valuation last December.
Recent reports suggest Octopus could be eyeing a bid for rival Bulb Energy, which is racing to secure new funding as the energy price crisis bites. A spokesperson for Octopus declined to comment.
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