Octopus Energy was established in August 2015 as a subsidiary of Octopus Capital Limited. Trading began in December 2015. The company's founder and Chief Executive Officer is Greg Jackson. By April 2018, the company had 198,000 customers and had made an energy procurement deal with Shell. Later in 2018, Octopus gained the 100,000 customers of Iresa Limited, under Ofgem's Supplier of Last Resort process, after Iresa ceased trading. The same year, Octopus replaced SSE as the energy supplier for M&S Energy, a brand of Marks & Spencer, and bought Affect Energy, which had 22,000 customers. In March 2019, Octopus had more than 600,000 customers. In August 2019, an agreement with Midcounties Co-operative saw Octopus gain more than 300,000 customers, taking its total beyond 1 million. Three Co-op brands were affected: Octopus acquired the customers of the GB Energy and Flow Energy brands, and began to operate the accounts of Co-op Energy customers on a white label basis, while Midcounties retained responsibility for acquiring new Co-op Energy customers. In both 2018 and 2019, Octopus was the only energy supplier to earn "Recommended Provider" status from the Which? consumer organisation. In January 2020, Octopus was ranked first in a Which? survey and was one of three recommended providers. In September 2019, Octopus acquired German energy provider 4hundred – the first international expansion for the company. In January 2020, ENGIE UK announced that it was selling its residential energy supply business to Octopus Energy. The same month saw the launch of London Power, a partnership with the Mayor of London. In May 2020, Australian electricity and gas supplier Origin Energy paid 507 million for a 20% stake in Octopus Energy. This meant Octopus gained "unicorn" status, as a startup company with a value in excess of £1 billion.
Operations
As of May 2020 the company had over 1.5 million domestic and business customers. The company does not generate gas or electricity, instead making purchases on the wholesale market, although sister company Octopus Renewables claims to be the UK's largest investor in solar farms, and also invests in wind power and anaerobic digesters., Octopus Energy stated that all its electricity came from renewable sources, and it offered a "green" gas tariff with carbon offsetting. Besides industry-standard fixed and variable tariffs, the company is known for innovative tariffs which are made possible by the national rollout of smart meters. These include:
Octopus Tracker – gas and electricity prices change every day, and are based on wholesale prices for that day, with disclosure of overheads and the company's profit margin.
Octopus Agile – electricity prices change every half hour, according to a schedule published the previous day, determined from wholesale prices. The price occasionally goes negative at times of high generation and low demand.
Octopus Go – a tariff with a reduced rate for an overnight period, intended for owners of electric vehicles.
The company claims to treat customers more fairly than the "Big Six" suppliers. In March 2019, Octopus Energy announced it had partnered with Amazon's Alexavirtual assistant, to optimise home energy use through the Agile Octopus time-of-use tariff. As part of their partnership agreed in August 2019, Midcounties Co-operative and Octopus established a joint venture to develop the UK's community energy market and encourage small-scale electricity generation.
Brands
Besides the Octopus Energy brand, as of 2020 customers are supplied under the Affect Energy, Co-op Energy, M&S Energy and London Power brands.
Software development
A significant part of Octopus Energy's profit and revenue comes from licensing their proprietary customer management system called Kraken. It was first licensed by UK rival Good Energy in late 2019, for an initial three-year term, to manage its 300,000 customers. In March 2020 it was announced that E.ON and its nPower subsidiary had licensed the technology to manage their combined 10 million customers. The software would also be licensed to Australia's Origin Energy as part of their May 2020 agreement.
