Octopus Energy closes a funding of $600m from Generation Investment Management
Two weeks ago Octopus Energy – our very own rampaging unicorn – closed a funding round of $600m at a valuation of $4 billion. While this is exciting in itself – especially given the business is only five years’ old – the new investor we’ve brought on board is another reason to celebrate.
In Generation, we found ‘the one’ – our missions are aligned
It’s fair to say that in Generation we found ‘the one’. Greg and I have both known Generation for a few years now and in theory they’ve always seemed like a good fit for the business. We’re both B Corps and we’re both very long term in how we think about the businesses we’re building. In practice, all our interactions over the last few months simply reinforced this belief.
Sustainability and the fight against climate change run through Generation’s DNA, as they do through both Octopus Energy and across the wider Octopus Group. Al Gore, the Chairman of Generation Investment Management and Nobel prize winner for climate activism, believes this investment is fuel to Octopus Energy’s ambition to drive and accelerate the green energy revolution around the world.
This all stems from the mission of Octopus Energy. It wants to use technology to make the world’s transition to renewable energy faster and cheaper for tens of millions of people. This clarity of mission means that the business attracts very like-minded people. People who care deeply about trying to solve the climate problem. So when their company receives funding from one of the most influential and powerful climate activists in the world, it cements their belief in what they’re part of and validates how they spend their time. This tends to mean that they genuinely love their jobs which, in turn, translates into a level of commitment, work ethic and purpose that is very difficult for others to compete against.
So what made us choose Generation as the right partner for the next stage in the company’s journey?
The first thing to say is that Octopus Energy has always been in a very fortunate position. It’s had more inbound interest – from both an investment and a commercial perspective – than any company I’ve worked with in the last 20 years. Partly because the problem it’s setting out to solve is the number one societal issue across the world, and partly because it’s unique in that it’s an energy company with millions of customers (and £3.5 billion of renewable assets) that’s putting technology at the heart of every part of its business.
Towards the end of this funding process Greg and the wider Board had the (lovely) problem of choosing which offer to progress with. This might seem a bit strange, but I thought of it a bit like a marriage. These are people we’ll hopefully be working with for decades to come and while I’m sure there will be ups and downs for the business, it’s important to know that the people we’re choosing to work with are truly aligned. The same values, the same time horizon, and the same mission.
Bringing them on board hasn’t changed the ambition of the business though. The same big target remains – namely to get to 100 million energy accounts by 2030. Both through customers we look after ourselves across all the countries we now operate in, but also through Kraken (our proprietary technology platform that supports the smart grid and transforms the efficiency and customer service of other energy suppliers).
Greg has, however, rather predictably moved forward the date by which he’ll achieve this. 100 million by 2027. So only 83 million or so to go.