Australian investment values Octopus Energy at £1bn

Octopus Energy has been valued at more than £1 billion after receiving a £300 million investment for a 20 per cent stake from Australian power company Origin Energy.

The agreement will see Origin licence Octopus’ proprietary Kraken platform. Origin will also provide a three-year company guarantee to support the working capital for Octopus’ international energy business.

Speaking to Utility Week, Octopus Energy founder and chief executive Greg Jackson said Australia was an ideal country to expand in to as it was a big market with a small population and avoided conflicting interests elsewhere on the global market.

Jackson added that plans to use the investment to fund a future energy research centre was what he was most excited about. The centre will be used to conduct modelling using data collected from Octopus’ real-world tariffs that will be made available for governments wishing to invest in green technologies.

He said: “This is the most exciting bit for me, we have been pioneering smart grid technologies such as our Agile tariffs and tacker tariffs. We have now got unique data, we will invest to make sure that is modelled and available to policy makers globally.

“We have all the data from the real world, we know how real customers behave in real situations.”

Octopus, which currently supplies 1.5 million UK customers, announced last year that it was in its “expansion phase”, following the acquisition of German green energy supplier 4hundred. Earlier this year energy giant Eon became the second UK supplier to acquire the Kraken platform, with Good Energy being the first.

Octopus also powers Co-op Energy, M and S Energy, Affect Energy, London Power and Tesla Power. Across all its operations and licenses, there are more than 17 million energy accounts on the Kraken platform.

In a statement accompanying the Origin announcement, Jackson said: “It’s a testament to our team and our technology that in just four years we’ve created a business which has the world beating a path to our door and can face the future with such excitement.

“We’ve known Origin for a long time, and it has the most forward-thinking management of any market-leading energy company we’ve met. We’re looking forward to working with Origin to use technology to reduce energy costs, increase renewables and improve customer service in the UK, Australia, Germany and now many more countries too.”

Meanwhile Origin Energy chief executive Frank Calabria, said: “We have been on a path to make energy easier and simpler for customers, to transform our retail business by putting customers at the heart, and to accelerate the rollout of cleaner and smarter energy solutions. By partnering with Octopus and deploying its technology platform, we can fast-track our ambitions and achieve better outcomes for our customers, people and shareholders.

“We’re also pleased to be investing in a company with an operating model and technology platform that genuinely sets it apart globally, and we see exciting opportunities for our businesses to collaborate, share expertise and continue to grow and prosper in the fast changing world of energy.”