UK energy provider Octopus Energy has entered the Italian energy market with the acquisition of retailer SATO Luce e Gas.
The company has used funding from its US$600 million (£438 million) injection from Al Gore-backed Generation Investment Management for the acquisition. The acquisition of SATO valued the Octopus Energy Group at US$4.6 billion (£3.6 billion).
Octopus Energy Italy will target a million Italian energy accounts – or roughly 5% of the market – by 2025, using an initial investment of €60 million (£50.6 million) from Octopus Energy to expand its operations.
“We have high ambitions for Italy, and we’ve found an amazing team to grow our business and lead the green energy revolution in Italy from the front,” said Greg Jackson, CEO and founder of Octopus Energy.
“We know that the Octopus way works – our teams in the US and Germany have seen their customer bases grow by a factor of five and six respectively over the last year. We’re now taking our approach to Italy, and we can’t wait to see what we can achieve there.”
Since it was established just over five years ago, Octopus Energy has gained 3.1 million UK customers. Over the past two years it has also expanded significantly internationally, and now operates across four continents.
In August 2021, it entered the Spanish market with the acquisition of green energy startup Umeme, it expanded into Germany in November 2020, the US in September 2020 and Australia in May 2020 – this final expansion included a 20% acquisition from integrated energy company Origin Energy, which turned Octopus Energy into a 'unicorn' startup.
The company says its success is based on its proprietary cloud-based energy technology platform Kraken, which enables smart tariffs. In addition to its own customers, Kraken is used by a number of other suppliers with a new deal to migrate EDF’s five million UK customers to Kraken announced in November for example.
As well as its international supplier expansion, in November the Octopus Energy Group signed an new deal with Elia Group at COP26, to build a smart green energy grid across Belgium and Germany. This will be based on the company’s KrakenFlex platform, which was previously developed as Upside Energy before Octopus acquired it in 2020.
SATO Luce e Gas was set up in 2003 in Ascoli Piceno, and has since grown to operate in 11 Italian regions and to have thousands of supply customers.
“In SATO we speak directly to customers every day and we know for a fact that many Italians - especially the 40% of households who have never switched - are still treated as numbers by their current energy provider,” said Giorgio Tomassetti, CEO of SATO Luce e Gas.
“Together with Octopus Energy we will make this approach to customer service a thing of the past, and we will make sure to give Italians a credible alternative, while also helping people decarbonise their homes and join the renewable energy revolution.”