Octopus Energy has raised $800m (£630m) from its shareholders in a move that values the company at nearly $8bn, weeks after it became Britain’s biggest power supplier.
Its existing investors, which include Japan’s Tokyo Gas and Al Gore’s Generation Investment Management, have ploughed in extra cash as the value of the utility company surged by 60% since its last fundraising round two years ago.
The company said the investment was expected to create “3,000 green jobs” in the UK in 2024.
Earlier this month, Octopus completed the acquisition of Shell Energy – which the oil major put up for sale earlier this year – making it the UK’s largest domestic power supplier.
Octopus was founded in 2015 by Greg Jackson, an entrepreneur who has had several ventures including a customer relationship tech business sold for £4.5m in 2006. It has grown rapidly to compete with established players in the energy industry, including British Gas and E.ON, during a decade of flux in the industry.
Octopus emerged in a wave of upstarts attempting to disrupt existing domestic gas and electricity suppliers. However, nearly 30 suppliers collapsed amid a surge in wholesale gas prices.
Octopus’s growth has been aided by the acquisition last year of the supplier Bulb Energy, which collapsed into a government-handled administration, in a deal that was challenged by rivals in court.
Separately, Octopus said the deal to buy Shell Energy, which has 1.3 million home energy customers, meant it had a greater share of the domestic electricity supply market, with 21.3%, than British Gas’s 20.4%, according to figures from the industry regulator, Ofgem.
Jackson stressed the company’s green credentials on announcing the fundraising: “With the renewed commitment seen at Cop and our model proven, we will invest to accelerate our growth and create a truly global clean energy giant.”
The Australian firm Origin Energy and the Canada Pension Plan Investment Board also participated in the fundraising. The Origin Energy chief executive, Frank Calabria, said of the investment: “The success of Octopus since our initial investment in May 2020 has exceeded all expectations and cemented our belief in its unique capabilities and strong platform for future growth.”
Jackson has been a keen champion for the rollout of heat pumps in the UK. If the Labour party gains power, Keir Starmer will be under pressure to set out his plans for the technology, amid calls for low-income households to be given a free electric heat pump to replace their gas boiler.
The Labour leader and the shadow chancellor, Rachel Reeves, toured an Octopus facility in Slough earlier this year to examine technology the firm is working on.
