Octopus Energy has become a unicorn, thanks to Australian energy company Origin Energy acquiring a 20% stake.
The strategic partnership will see Origin gain a license for Octopus Energy’s technology platform, Kraken, allowing it to accelerate the transformation of its own retail business.
Origin will help provide the UK energy supplier with a three year guarantee to support its working capital.
Octopus Energy is intending to use the investment to open and expand in more markets, it said. Along with investing in deeper technology development and establishing the Future Energy Research Centre. This is designed to bring together academics, policy experts and data scientists to develop research and modelling to drive the energy transition.
The company’s founder and CEO, Greg Jackson, said Octopus was “thrilled” to be able to accelerate its global expansion and to speed up the green energy transition.
“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.”
The deal has been under discussion since 2019 and will increase Octopus Energy’s valuation to over £1 billion, giving it unicorn status. The Octopus Group remains the majority owner and across its portfolio has contracted software licensing revenue exceeding £300m over the next three years.
The Group is the largest investor in UK solar and has £9 billion worth of investments in energy, technology and growth businesses.
Octopus Energy has grown significantly in recent years, and now supplies power and gas to 1.5 million homes in the UK.
Its Kraken platform has been a adopted by a number of suppliers, and is now contracted to support over 17 million energy accounts. This includes powering Good Energy and Hanwha Corporation and Octopus Energy, as well as Co-op Energy, M&S Energy, Affect Energy, London Power and Tesla Power in the UK.
Most recently, Octopus Energy signed a technology deal with E.On, which saw npower and E.On’s 6 million customers move onto Kraken.
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.”