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When is an Octopus a Unicorn?

1 May 2020

Written by Simon Rogerson

There are lots of reasons behind an entrepreneur’s success. The one that’s most commonly (and conveniently) overlooked, however, is luck. While I’m a big believer in Gary Player’s famous quote that “the harder I practice, the luckier I get”, there’s no escaping the role of good fortune in building a great business. For me, one of these moments came about five years ago when I met a man called Stuart Quickenden.

At the time, Stuart was the UK Managing Partner for Boston Consulting Group. I asked him if he knew anyone from the energy industry who he thought might be interested in building an energy supply business. He immediately mentioned two people and then, as he was leaving, he mentioned a third.

I met all three. The first two were accomplished business heads from some of the UK’s largest energy companies. But they weren’t very Octopus and they didn’t have any experience in building a start-up. The third was a serial entrepreneur who’d spent the previous 15 years building his own technology businesses. His name was Greg Jackson.

It’s happened only a handful of times in the 20 years since Octopus was set up, but very, very occasionally, I meet someone extraordinary. Someone who bleeds energy, who you instinctively want to follow and who has the holy trinity of skills an entrepreneur in today’s world needs – people, customer and technology. Greg is one of these people.

The Kraken factor 

Over the last five years, Greg and his team have been building Octopus Energy. I’ll stick to the facts rather than let my bias take over, but it’s been a standout success on almost every level. From its launch in 2016, the business has grown to 1.5 million customers and its unparalleled customer service and value have won a plethora of awards, including Which? Utility Brand Of The Year, USwitch Supplier Of The Year, Utility Week Disruptor and Utility Of The Year, UK Employee Experience Awards Best Company To Work For and these are matched with outstanding ratings on both Trustpilot and Glassdoor.

At the heart of its success is a proprietary technology platform called Kraken. Kraken allows them to deliver the best service in the energy sector and puts them at the vanguard of making energy both cheaper and greener. They were also a major proponent of the energy price cap in the UK and are the energy supplier doing most to make a renewables-powered smart grid a reality.

Kraken is now widely recognised as the world’s leading operating platform for energy supply businesses. Last month they announced a huge deal with E.On, which will see Npower and E.On’s six million UK customers move onto the Kraken platform. And it won’t end there. There are dozens of other energy supply businesses round the world camped on our doorstep asking to engage in licensing opportunities as they transition away from inflexible and customer-unfriendly operating systems. By 2030, we expect Kraken to be powering the energy experience for more than 100 million people around the world.

The purpose of this blog, however, is not simply to trumpet what’s been achieved so far. It is to mark the next stage in the life of Octopus Energy. Greg and I have known for a while that to deliver on the scale of our ambition we’d need a partner. 

A new partner to share our long term vision

That’s why we’ve spent the last 12 months sharing our vision with potential investors around the world. I’m delighted to announce that we’ve chosen Origin Energy, Australia’s largest energy company, as our partner. The deal with Origin will see over £300 million injected into Octopus Energy over the next three years.

We chose Origin because, more than anyone else, they understood our mission to use technology to improve service, drive down costs and make energy greener. Indeed, as part of this partnership, Origin will themselves license the Kraken platform to make their Australian business even more efficient, improve customer experience and support their renewables expansion. We also chose Origin because of the chemistry. We come to work in the morning because we love what we do and it was crucial that we were partnering with people who shared our culture and way of working, as well as our vision.

As well as helping to power the growth of our energy supply business in the UK and internationally, Origin’s investment will also allow us to invest millions of pounds in creating The Future Energy Research Centre. This Centre will bring together climate experts, data scientists, economists and policy specialists to devise plans and models to make net zero faster and more affordable. Octopus Energy will freely contribute its data and technology expertise to give these experts unique insight into how customers, networks and grids can contribute to a faster, more affordable transition to renewables.

A milestone, but the start – not the end

To answer the question in the title of this blog, the investment from Origin means that this particular Octopus has now become a Unicorn, the label for start-ups valued at more than £1 billion. While we’re proud of this achievement, I’ll end by saying three things.

First, we build businesses to make a difference in the world rather than to make a financial return. In our experience, when we get this right, the value follows.

Secondly, this is only a marker in our journey. The scale of the energy opportunity globally is colossal and we believe that we have the technology, the team and, with Origin now on board, the partner to build something amazing over the next decade.

Thirdly, two thank yous. To Stuart Quickenden for the introduction. And to Greg and his team for everything they have sacrificed and achieved over the last five years. 

 

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