Australia’s largest utility will pay £265m for a 20 per cent stake in Octopus Energy.

It will pay £70m on completion and £195m in batches out to 2023. Origin will use Octopus’ Kraken customer platform, which Eon has also licensed, in a bid to reduce costs and improve service (Origin’s ASX filing suggests Kraken cuts cost to serve customers by at least 40 per cent). Octopus will create a version of Kraken for Origin and help it migrate customers to the platform over the next three years.

The deal values Octopus, which last year reported a loss of £30m as it grew rapidly, at over £1bn. The supplier now has 1.5m UK customers and annualised revenues of around £1.5bn.

Post transaction, Octopus Group will own 60 per cent of the company, Octopus management and staff 20 per cent, and Origin 20 per cent.

Octopus founder and CEO, Greg Jackson, said the deal “will see well over £300m of new funds injected into the business over the next three years, with most of it in the first year.”

As well as funding further growth and new services, he said the capital injection will “will help us invest millions of pounds in creating The Future Energy Research Centre, bringing together climate experts, data scientists, economists and policy specialists to devise plans and models to make net zero faster and more affordable”.

Origin owns Australia’s largest coal-fired power station and also exports liquefied natural gas. Jackson acknowledged that “some people will question our choice of partner” on that basis.

However, he said “almost every potential investor” had a hand in fossil fuels and is convinced that Origin’s pledges to become greener are genuine.

Greg Jackson: Changing things up.

“Moreover, Origin were happy in our discussions to leave Octopus Energy with the freedom to pursue our green energy mission globally, with no restrictions,” stated Jackson. “They will appoint a director to sit on our board, but the day to day management and senior team of Octopus Energy will not change.”