Octopus Energy has boosted its valuation to $8bn (£6.3bn) after raising $800m from investors.
Britain’s second-largest gas and electricity supplier said it plans to use the cash to fuel its global expansion and grow its heat pump business, as it aims to capitalise on the Government’s push for net zero.
In its latest round of fundraising, the Canada Pension Plan Investment Board has pledged $326m, while Australia’s Origin Energy added $305m.
Two other investors are contributing to maintain their existing percentage stake: Tokyo Gas, the largest natural gas utility company in Japan; and Generation Investment Management, which was founded by the former US vice-president Al Gore and positions itself as a net-zero investor.
In a previous fundraising round two years ago, the company was valued at £4bn.
By comparison, British Gas owner Centrica is currently valued at £7.7bn on the London Stock Exchange.
An industry source told The Telegraph that Octopus had already overtaken Centrica as the biggest supplier of electricity in the UK, but that it was not interested in becoming market leader in gas because it saw heat pumps as the future.
Greg Jackson, the Octopus chief executive, said: “We will invest to accelerate our growth and create a truly global clean energy giant.”
Frank Calabria, the chief executive of Origin Energy, said that since its initial investment in May 2020, Octopus had “exceeded all expectations and cemented our belief in its unique capabilities and strong platform for future growth”.
The company has started to install heat pumps in the UK this year, while also manufacturing its own models. This comes as the Government plans to ban traditional gas boilers from new-built houses and looks for ways to hit its target of net zero emissions by 2025.
Octopus says the investment will help create 3,000 “green jobs” in the UK next year, including 2,000 engineers installing heat pumps, with the remainder in sales and administration.
The business was founded in 2015 but has grown rapidly to serve more than 5m UK households.
At the start of December it completed its acquisition of 1.3m Shell Energy customers in the UK and Germany. It has also been appointed by Ofgem to be the “supplier of last resort” for customers served by a string of energy companies that have become insolvent over the past three years.
The company’s tentacles have expanded into rival domestic energy companies, with its Kraken computer system being adopted by E.On, EDF and Good Energy.
Earlier this month, it secured a £550m funding facility from Lloyds Bank for its electric vehicle leasing business, which works with 4,000 companies.
Octopus now operates in 18 countries.
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