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Octopus Energy spreads its tentacles to US in $100m expansion

Octopus Energy 
Octopus Energy

Octopus Energy, the challenger energy supplier, has said it will spend £100m on expanding into the US as part of a major push to take its technology international.

The London-based company, which currently has 1.7m gas and electricity customers in the UK, has said it will acquire a Silicon Valley energy startup in order to bolster its position in America.

The company is already in talks with two large energy companies in the US, the chief executive Greg Jackson said in an interview with The Telegraph.

Mr Jackson said that the move was being fuelled by a £400m investment it received from an Australian backer this year.

“The purpose of that investment was to fund our expansion, not just in the UK but across maybe a dozen countries in the next few years,” he said. “We’re planning on investing another $100m or so to grow it to the same sort of scale that we have here in the UK.”

The US has a heavily regulated energy market, with each state having a number of publicly-owned utilities. The country has faced rolling blackouts in recent months while the ageing power grid is buckling from the influx of renewable energy.

Octopus will first launch in Texas, one of the deregulated states, before moving into a further 13 states that are more open to competition.

In order to support this expansion, Octopus said it had acquired Evolve Energy for $5m.

Evolve is a Silicon Valley start-up that has developed technology to manage its customers’ energy usage, making it an attractive acquisition for Octopus which has its own, widely used technology platform.

Mr Jackson said he planned to roll out Octopus’ Kraken customer service platform, which can be licensed to fellow energy suppliers, across the US.

Octopus estimates that the cloud-based platform will rake in more than £300m in licensing fees over the next three years.

“For years, people have asked when there will be a British Amazon or British Uber,” said Mr Jackson, adding: “Energy is the market where this can happen.”

“We probably have the most competitive, dynamic energy market anywhere in the world.”

This marks the third country Octopus has expanded into so far, having previously launched operations in Australia and Germany.

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