Global expansion on cards for energy technology group as major strategic partnership values firm at more than $1 billion
Australian energy company Origin has acquired a 20% stake in London’s Octopus Energy, valuing the UK energy tech group at more than $1 billion.
The agreement will see Origin license Octopus’ technology platform, Kraken, to accelerate the transformation of its Australian retail business, deliver an improved customer experience and to provide cleaner and smarter energy solutions.
Origin will also provide a three-year company guarantee to support the working capital for Octopus Energy’s UK and international energy business.
The deal, which will see Origin pay £70m on completion and £195m in batches out to 2023, gives Octopus an energy retail arm in Germany and contracted software licensing revenue exceeding £300m over the next three years.
Octopus Energy will deploy the investment to open and expand in more markets, invest in deeper technology development, and to establish a Future Energy Research Centre, bringing together academics, policy experts and data scientists to drive research and modelling to make the global renewable energy transition faster and cheaper.
Octopus Energy founder and CEO Greg Jackson said: “We’re thrilled to be able to accelerate our global expansion to make the green energy transition cheaper and faster.
“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.”
Octopus remains majority owned by Octopus Group, the £9bn UK investor in energy, technology and growth businesses. Octopus is the UK’s largest investor in solar energy, and has recently announced Australia’s largest solar farm.
The investment comes on top of Octopus Energy’s technology deal with E.On, announced last month, which will see npower and E.On’s 6 million UK customers move onto Octopus Energy’s Kraken platform.
In addition to existing deals with Good Energy and Hanwha Corporation, Octopus Energy also powers Co-op Energy, M&S Energy, Affect Energy, London Power and Tesla Power in the UK. Across all its operations and licenses, the Kraken platform is now contracted to support over 17 million energy accounts.
Octopus Energy’s own retail business now provides gas and electricity to 1.5 million homes in the UK.
Origin Energy CEO 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.”