Have you heard about Challenger Banks? Now meet challenging energy suppliers. To start the joint venture, the UK’s Octopus Energy has received $ 2.06 billion (£ 1.5 billion) after an investment of $ 200 million (£ 150 million) from Tokyo Gas for $ 9.7 million. Octopus will own 30% of the venture, with Tokyo Gas owning a majority. Five years after operation, the octopus is now close to the valuation of British Gas owner Centric.
Octopus will now launch in Japan as a brand with its trademark 100% renewable electricity operations that use an innovative AI and data-based platform to balance the load around the grid. Its Kraken software has been licensed to access 17 million energy accounts worldwide, among others from Origin Energy, Enpower and E.ON, Good Energy and Hanva Corporation.
In a statement, Chief Executive Greg Jackson said, “This joint venture will bring our exciting approach to renewable energy and technology to the world’s largest competitive energy market, and the investment will further our mission.”
Australia’s Origin Energy is also set to take a $ 50 million (£ 37 million) stake in Octopus after a major investment in April when Origin bought a 20% stake.
Octopus says it aims for 100 million customers worldwide by 2027, and has recently launched in the US, Australia, Germany and New Zealand.
In the UK, Octopus has a 5% share in the energy supply market and, according to the company, counts 1.8 million homes in its retail portfolio.
Tokyo Gas President Takashi Uchida said: “Through this partnership, we will contribute to the achievement of a better lifestyle for customers by value creation and consistent delivery to each one of them.”
Japanese renewables lagged Britain by 50% (18.9% of renewable energy in Japan vs. 37.9% growth in Britain in 2019) so the potential for growth is significant. Japanese Prime Minister Yoshihida Suga aims to reach net-zero by 2050.
Octopus has also launched electric juicing network Electric Juice in the UK and partnered with Tesla to launch Tesla Power.