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Octopus Energy sees 160% jump in revenue but still records loss due to ‘relentless investment’

Image: Octopus Energy.

Image: Octopus Energy.

Octopus Energy saw its revenue grow +160% in the fiscal year 2019/2020, jumping from £477 million to £1.24 billion.

Since then, this has continued to grow with the company estimating it will reach £2 billion by the year end April 2021. Gross margins increased from 0.8% to 5.4% (6.8x) driven predominantly by efficiency enabled by Kraken technologies, while gross profit increased from £3.5 million to £67 million (+1,800%).

Despite this growth, the company has posted a £53 million loss for the year 2019/2020 due to “relentless investments” in international expansion, technology development, product innovation and customer growth.

This included expanding into Germany in November, the US in September and Australia in May 2020 – this final expansion including a 20% acquisition from Origin Energy, which turned Octopus Energy into a unicorn.

In the UK, the company’s customer base doubled to 2.3 million accounts, or 1.4 million households. This has continued into the full-year for 2021, and hit 2.1 million households in April 2021, which brings it up to a 7.5% market share just five years after the company was launched.

Octopus Energy launched six new product solutions during the 2019/2020 year, including the world’s first electricity tariff for vertical indoor farms. It acquired British smart home energy management company nCube to help enable continued growth, as well as entering into strategic partnerships with the Mayor of London and the Midcounties Co-operative – which has just been relaunched as community energy joint venture Younity.

“The UK business operates at sustainable operating margins, with Kraken enabling lower operating costs than rivals,” said Greg Jackson, CEO and founder of Octopus Energy Group.

“Our net loss of £53 million is driven by our relentless investment in new technology for a low-carbon grid, expansion into more countries and markets and investing in customer growth. Our mission to drive cheaper, greener energy globally is truly gathering pace.”

During the 2019/2020 year, the Octopus Group started licensing Kraken to other energy retailers, and has now entered agreements with Korean energy company Hanwha and the UK energy providers E.ON and Good Energy, taking the total number of accounts supported to 17 million. Last week E.ON announced that two million former npower customers had been migrated to its new Kraken powered E.ON Next customer service platform.

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