Octopus Energy Group is a British renewable energy group. It was founded in 2015 with the backing of Octopus Group, a British asset management company. Headquartered in London, the company has operations in the United Kingdom, France, Germany, Italy, Spain, Australia, Japan, New Zealand and the United States. Octopus is the UK's largest supplier of electricity to domestic customers, and the second largest in domestic gas
Octopus Energy Group operates a range of business divisions including Octopus Energy Retail, Octopus Energy for Business, Octopus Energy Services, Octopus Electric Vehicles, Octopus Energy Generation, Octopus Heating, and Kraken Technologies, and supports the independent not-for-profit think-tank Centre for Net Zero. The company also supplies software services to other energy suppliers.
Financial history
In September 2019, Octopus acquired German start-up 4hundred for £15 million; the acquisition of 4hundred, which had 11,000 customers, was Octopus' first overseas expansion
In May 2020, Australian electricity and gas supplier Origin Energy paid A$507 million for a 20% stake in Octopus. This meant Octopus gained "unicorn" status, as a startup company with a value in excess of £1 billion. In September of that year, Octopus acquired Evolve Energy, a US Silicon Valley–based start-up, in a US$5 million deal. The acquisition was the first step in Octopus' $US100 million US expansion; at the time of the acquisition, Octopus announced it was aiming to acquire 25 million US customers, and 100 million global customers in total, by 2027.
In December 2020, Tokyo Gas paid about 20 billion yen ($US193 million) for a 9.7% stake in Octopus, valuing the company at $US2.1 billion. Octopus and Tokyo Gas agreed to launch the Octopus brand in Japan via a 30:70 joint venture to provide electricity from renewable sources, amongst other services. Origin invested a further $US50 million at the same time, to maintain its 20% stake.
In August 2021, Octopus entered the Spanish market with the acquisition of green energy start-up Umeme. Upon the acquisition, Octopus announced it was targeting a million Spanish energy accounts under its brand by 2027. In November 2021, Octopus acquired Italian energy retailer SATO Luce e Gas, rebranding the business as Octopus Energy Italy, investing an initial £51 million and targeting 5% of the Italian market by 2025. As a result of these acquisitions, Octopus now has retail, generation or technology licences in 13 countries across four continents.
In September 2021, Generation Investment Management, co-founded and chaired by Al Gore, purchased a 13% stake in Octopus Energy Group in a deal worth $US600 million. The investment increased the company's valuation to $US4.6 billion, with the cash injection to be used by Octopus to increase its investment in new technologies for cheaper and faster decarbonisation.
In December 2021, Octopus Energy announced a long-term partnership with Canada Pension Plan Investment Board, raising US$300 million and taking the valuation of Octopus Energy Group to approximately $US5 billion.
In January 2022, Octopus Energy entered the French market with the acquisition of Plüm énergie, a French energy start-up with 100,000 retail and corporate accounts. Plüm was subsequently rebranded as Octopus Energy France.
Further funding of $800m from existing shareholders in December 2023 brought the valuation of Octopus Energy to nearly $US8 billion.
Operations
Gas and electricity supply
As of March 2023 the company has nearly 3 million domestic and business customers.
Besides industry-standard fixed and variable tariffs, the company is known for innovative tariffs which are made possible by the national rollout of smart meters. These include:
- Octopus Tracker – gas and electricity prices change every day, and are based on wholesale prices for that day, with disclosure of overheads and the company's profit margin.
- Octopus Agile – electricity prices change every half hour, according to a schedule published the previous day, determined from wholesale prices. The price occasionally goes negative (i.e. customers are paid to use electricity) at times of high generation and low demand.
- Octopus Go – a tariff with a reduced rate for an overnight period, intended for owners of electric vehicles.
In March 2019, Octopus announced it had partnered with Amazon's Alexa virtual assistant, to optimise home energy use through the Agile Octopus time-of-use tariff.
As part of their partnership agreed in August 2019, Midcounties Co-operative and Octopus established a joint venture to develop the UK's community energy market and encourage small-scale electricity generation.
Investment trust
Octopus Renewables is contracted as the investment manager for Octopus Renewables Infrastructure Trust, an investment trust established in 2019 which owns wind and solar generation in the UK, Europe and Australia.
Electric vehicle charging
The Electric Universe service, which aims to simplify public charging of electric vehicles, was launched in 2020 as Electric Juice and rebranded in 2022. As of September 2022, more than 450 charging companies were taking part, allowing customers access to over 300,000 chargers in over 50 countries through a single card and/or app. All drivers can use the service, and Octopus Energy customers have the option of paying their charging costs through their domestic energy bills.
Marketing
Climate change
In 2019 Octopus launched a 'Portraits from the Precipice' campaign, which sought to raise awareness of climate change and encouraged customers to switch to greener energy deals. The campaign artwork was exhibited at over 5,000 sites, making it the largest ever digital out-of-home art exhibition. As a result of the campaign, Octopus registered a 163% increase in sign-ups and gained 37,000 customers. The campaign won the 2020 Marketing Week Masters award for utilities, and the 2020 Energy Institute award for Public Engagement.
Solar energy at COP26
In November 2021 Octopus financed 'Grace of the Sun', a large-scale art piece by Robert Montgomery made using the Little Sun solar lamps designed by Olafur Eliasson and Frederik Ottesen. The project, which coincided with COP26, was realised in Glasgow through collaboration with the local art community, and was designed as a call for global leaders to invest in renewable energies such as solar PV, in order to power a sustainable future
Software development
Octopus Energy licenses their proprietary customer management system called Kraken, which runs on Amazon's cloud computing service. It was first licensed by UK rival Good Energy in late 2019, for an initial three-year term, to manage its 300,000 customers.
In March 2020 it was announced that E.ON and its Npower subsidiary had licensed the technology to manage their combined 10 million customers. In May 2021 it was announced that E.ON had completed the migration of all two million former npower customers to its Kraken-powered E.ON Next customer service platform. The migration was hailed as being responsible for E.ON's financial recovery in the UK.The Kraken software was also licensed to Australia's Origin Energy as part of their May 2020 agreement.
In November 2021, EDF Energy agreed a deal with Octopus Energy Group to move its five million customers onto its Kraken platform. The customer accounts will be migrated onto Kraken from 2023, increasing the number of energy accounts contracted to be served via Kraken to over 20 million worldwide. Kraken also has strategic partnerships with Hanwha Group and Tokyo Gas
In August 2024, Kraken announced the appointment of its own CEO, Amir Orad.
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