Octopus Energy offices in Leicester

Octopus hits £1.5bn valuation ahead of Japan launch

Image credit: Octopus Energy

The London-based sustainable energy start-up has been valued at £1.5bn ahead of its expansion into Japan.

Octopus Energy, which specialises in sustainable energy, has gained 1.8 million UK households as customers since it was established in 2015. It has a 5 per cent share of the energy supply market, according to Ofgem.

Unlike most conventional electricity and gas suppliers, it also offers customer-management software (Kraken), which it licenses to competitors in the energy sector including nPower and E.On.

It acquired German energy provider 4hundred in September 2019 and entered the US market in September this year through the acquisition of start-up Evolve Energy.

The brand is due to launch in Japan in 2021, with plans to provide 100 per cent renewable electricity among other services. Octopus will own 30 per cent of the venture while Tokyo Gas will own the majority share. The joint venture will also use Octopus Energy’s Kraken software.

With Octopus’s value rising to £1.5bn, Tokyo Gas will invest £150m to claim a 9.7 per cent stake in the company. Australia’s Origin Energy has committed to a smaller stake in Octopus for £37m. The valuation means that the young challenger has a value not far behind that of British Gas owner Centrica.

“This joint venture will bring our exciting approach to renewable energy and technology to the world’s largest competitive energy market, and the investment will turbocharge our mission to revolutionise energy globally,” said Octopus Energy CEO Greg Jackson.

“When Origin invested less than eight months ago, we said it was fuel for stage two of our mission. Since then, Octopus Energy has accelerated that mission to make the global green revolution faster and cheaper by launching Octopus Energy Germany and New Zealand, acquiring Octopus Energy USA and acquiring Upside Energy to deepen our smart grid capabilities with their powerful technology.

“Tokyo Gas’s investment into Octopus Energy Group, and the additional investment from Origin, will enable our outstanding team to drive even faster at the forefront of the global energy revolution.”

Tokyo Gas president Takashi Uchida commented: “I believe that Octopus Energy, which is delivering diversified tariffs and services using digital technology through low costs in the UK and overseas, is the most appropriate partner for Tokyo Gas.

“Through this partnership, we will contribute to the achievement of a better lifestyle for customers by realising value creation and delivery tailored to every one of them.”


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