Octopus Energy Group has agreed a major strategic partnership with Tokyo Gas, one of Japan’s leading utilities, in a deal that values the UK entech pioneer in excess of $2 billion.
The agreement will see Octopus Energy and Tokyo Gas launch the Octopus Energy brand in Japan, operated by TG Octopus Energy, a 30:70 joint venture backed by working capital and growth funding provided by Tokyo Gas. International tech haven Tokyo will function as a launchpad for Octopus's expansion into the Asian market.
Octopus Energy in Japan will provide 100% renewable electricity amongst other services, helping to drive green energy in the world’s biggest competitive energy market. Japanese renewables lag the UK by 50% (renewables in Japan in 2019 accounted for 18.9% of electricity vs 37.9% in the UK) but the potential is huge and Octopus Energy aims to be at the forefront of driving this, supporting Prime Minister Yoshihide Suga's target of reaching net zero by 2050.
Octopus’s technology platform ‘Kraken’ will be licensed by the joint venture to deliver an improved customer experience and cleaner and smarter energy solutions to Japanese households. Today, Kraken is already contracted to serve 17 million energy accounts worldwide through Octopus’s own retail businesses, plus agreements with Good Energy, Hanwha Corporation, Origin Energy, nPower and E.ON.
The deal also sees Tokyo Gas take a 9.7% equity stake for consideration of $200m, alongside an approximate further $50m equity investment from Origin Energy, to continue its global expansion and technology development. This will see Octopus enhancing its smart grid capability and commitment to driving the green energy revolution around the world.
Since Origin’s initial investment in April 2020, the fast-growth disruptor has launched in the USA and Germany, as well as deepening its capabilities with the acquisition of Upside Energy, specialists in smart grid technology. In the UK it has launched Electric Juice, the country’s first electric vehicle roaming network, and partnered with Tesla to launch Tesla Power. In November 2020, Octopus Energy was named “Technology Company Of The Year” at the National Technology Awards.
Speaking for Octopus Energy, Founder and CEO, Greg Jackson said: “We are delighted to announce our agreement with Tokyo Gas, one of the most respected and successful Japanese utilities, to launch “Octopus Energy” in Japan. 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 turbocharge our mission to revolutionise energy globally.
When Origin invested less than 8 months ago, we said it was fuel for stage two 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.
Our UK retail business has grown to 1.8 million households, joining the ranks of The New Big 6, whilst maintaining outstanding service levels throughout Covid. We’ve launched Electric Juice, the first electric vehicle charging network and we have exciting plans for the electrification of heat.
Tokyo Gas’s investment into Octopus Energy Group, and the additional investment from Origin, will enable our outstanding team to drive even faster at the forefront of the global energy revolution.”
Speaking for Tokyo Gas, President and Representative Director, Takashi Uchida, said: "I believe Octopus Energy, which is delivering diversified tariffs and services using digital technology through low costs in the UK and overseas, is the most appropriate partner for Tokyo Gas. Through this partnership, we will contribute to the achievement of a better lifestyle for customers by realizing value creation and delivery tailored to every one of them.”