Origin’s tentacles get a top-up

Origin Energy has invested another $163 million to maintain its 20% stake in Octopus Energy, the fastest growing energy provider in the UK.

The latest investment by Origin takes its investment in Octopus to more than $700 million since its initial equity stake purchase in May 2020.

Origin said the price of its investment is the same as the last investment in September 2021.

“It follows recent investments in Octopus by other major international investors, Canada Pension Plan Investment Board (CPP Investments), Generation Investment Management (GIM) and Tokyo Gas, which have invested a total £175 million in the latest funding round. Origin invested 94 million pounds.

Origin told the ASX on Tuesday that Octopus has become the UK’s 5th biggest energy retailer in the two- and a-bit years it has been in business and now has a value of 3.5 billion pounds or more than $6 billion.

That’s because quite a few of its rivals collapsed in the big electricity and gas crisis in the UK late in 2021 and earlier this year – before the Russian invasion of Ukraine in late February.

As a result, Origin’s stake is now valued at nearly twice the investment cost.

Since Origin’s last investment in September 2021, “Octopus has made significant progress across its retail, renewable energy, and technology businesses,” Origin said in Tuesday’s statement.

“Octopus has grown to become the UK’s fifth largest energy retailer, increasing its customer base by 25 per cent to 3.1 million customers (5.5 million customer accounts).

“It recently entered the French market through the acquisition of Plum Energie, adding 90,000 customers and the Kraken segment is profitable and has doubled its revenue forecast for the next three years, to more than £500 million. In addition, renewable energy assets under management have increased by £600 million, to £4 billion.”

Investors liked that news and sent Origin shares up more than 3% on Tuesday to close at $5.84