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Generation Investment Management has acquired a 13 per cent stake in Octopus Energy Group for $600 (£437) million, giving the company a new $4.6 (£3.3) billion valuation.
The sustainable investment fund, chaired by former US vice president, Al Gore, is putting in $300 (£218) million now and the same amount again next June, subject to “certain further funding conditions”.
Origin Energy, which took a 20 per cent stake in the business last year, has agreed to pump in a further $55 (£40) million to maintain its shareholding.
Octopus stressed that the deal had been “several months in the making” and that funds would go towards enhancing its smart grid capability and “commitment to driving the green energy revolution around the world”, restating its ambition to support 100 million energy accounts on its Kraken platform by 2027.
Octopus Energy founder and chief executive Greg Jackson said: “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. So we are delighted to announce our agreement with Generation Investment Management, created to back sustainable companies changing the world for the better.
“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.”
This weekend Ofgem announced Octopus as the supplier of last resort for failed retailer Avro’s 580,000 customers – taking it to a 3.1 million total. Earlier this year, the company also took over its sister company, Octopus Renewables, taking on the management of £3 billion of assets.
Tom Hodges, partner in the long-term equity strategy at Generation, said: “Octopus Energy has an extraordinarily good fit with Generation’s mission of investing over the long term to support system and climate-positive companies.
“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. Generation is pleased to partner with Octopus Energy to help build that future.”
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