Venture Capital: Octopus Energy Clinches Japanese Investment And Supply Deal

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A $200 million investment from Tokyo Gas catapults Octopus’ valuation to $2.1 billion.

Octopus Energy has a mission: to disrupt the energy industry in Britain which “is ruled by a handful of complacent dinosaurs peddling fossil fuels, pricing trickery, and poor customer service.” Supplying green energy sourced from renewable sources, the startup is already adding 30,000 customers a month and supplies energy to 1.5 million homes in the UK. Expanding its international footprint, Octopus will soon enter Japan in collaboration with Tokyo Gas, the largest gas utility in Japan. (The Guardian)

Japanese joint venture

Tokyo Gas (TYO: 9531) and Octopus Energy will establish a new [30:70] joint venture that will establish the Octopus Energy brand in Japan. Tokyo Gas has agreed to acquire a 9.7% stake in the startup for $ 200 million.

The deal values the start-up at $ 2.1 billion. In May, Australian company Origin Energy (ASX: ORG) paid £300m for a 20% stake, bestowing on it the coveted “unicorn” title.

Origin is also investing $50 million alongside Tokyo Gas to maintain unchanged its percentage stake.

Greg Jackson, a serial entrepreneur, founded Octopus Energy in 2015. His 7.4% stake in the startup is now valued at about $155 million. Employees own 5%, their stake now valued at $100 million, or about $100,000 each.

Jackson said: “When Origin invested less than eight months ago, we said it was fuel for stage 2 of our mission. Since then, Octopus Energy has accelerated that mission to make the global green revolution faster and cheaper by launching Octopus Energy Germany and New Zealand, acquiring Octopus Energy USA, and acquiring Upside Energy to deepen our smart grid capabilities with their powerful technology.”

Kraken

A pillar of Octopus’ success is Kraken, its AI and data-based energy management platform that balances grid loads. It also enables consumers to earn money to use electricity during those times when renewable energy is abundant.

More than 17 million homes are connected to the Kraken platform.

The company  licenses out the platform to energy companies such as E.ON UK and Good Energy.

Related Story:  Softbank Vision Fund Makes its Maiden Investment in an Energy Firm

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