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Generation Investment Management Investing In Octopus Energy

Octopus Energy Blog

Al Gore’s Generation Investment Management is putting $600 million into startup Octopus Energy Group to boost a renewable energy platform designed to improve smart grid efficiency.

Three years ago, staff at the British startup Octopus Energy Group sat down to watch an “An Inconvenient Sequel,” the follow-up to “An Inconvenient Truth,” a 2006 documentary based on the bestselling book about the changing climate by former Vice President Al Gore.

Seeing that film inspired Octopus Energy to search for new and better ways to bring renewable energy to the world. Today, Octopus Energy and Gore are business partners, thanks to a $600 million investment from Gore’s Generation Investment Management

Photo Courtesy Octopus Energy Blog

The money will be used to help Octopus expand the market for its proprietary Kraken technology, a globally scalable platform designed to drive the smart grid and improve the efficiency and customer service of energy suppliers.

Generation Investment, co-founded in 2004 by Gore and former Goldman Sachs asset management head David Blood, will invest $300 million immediately, with $300 million to follow by June 2022. Generation will also take a 13% stake in Octopus, pushing the latter company’s valuation to roughly $4.6 billion.

The investment was announced on Sept. 27. Octopus will use the proceeds to “turbo boost its mission to drive the renewable revolution globally,” the company said in a press release.

One way Octopus plans to do that is with its Kraken technology, which is based on advanced data and machine learning capabilities. Its aim is to automate the energy supply chain and make it possible for customers to access power when it’s both cheaper and more sustainably sourced.

London-based Octopus uses Kraken to manage 17 million energy accounts in 12 countries. The company, which launched in 2016, has already become the fifth-biggest supplier of green electricity in the UK, Bloomberg reported. Octopus also has developed a network of 100,000 electric-vehicle chargers in the UK.

Some of the Generation Investment funds will be used to help Octopus expand its presence in the United States, where it currently operates in Texas. Octopus has also gotten investments from Origin Energy and Tokyo Gas and spent part of that money to acquire Upside Energy, a maker of smart grid technology.

Photo Courtesy Octopus Energy Blog

Generation Investment is a pure‐play sustainable investment manager whose stated mission is to “ensure that sustainable investing drives the transformative change required for a net-zero, prosperous, equitable, healthy and safe society.” The company manages more than $36 billion in assets from offices in London and San Francisco. It’s set up as a Certified B Corporation, meaning it must meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose.

Although Gore is probably best known as the vice president under President Bill Clinton, he also made a name for himself as the author of “An Inconvenient Truth: The Planetary Emergency of Global Warming and What We Can Do About It,”  Films accompanying the book played a big role in Octopus Energy’s decision to do more on sustainability.

“We watched ‘An Inconvenient Sequel’ and were inspired to accelerate and expand our mission to make energy greener faster, cheaper, across the globe,” Octopus Founder and CEO Greg Jackson said in a statement. “Being backed by Generation, co-founded and chaired by Al Gore, enables us to make that dream come true.” 

In addition to its work with renewable energy technology, Octopus has established the Centre for Net Zero, an independent research facility in London. The facility’s goal is to bring together leaders in technology, the environment, econometrics, and government policy to create research and tools that governments and businesses can use to accelerate the transition to sustainable energy and technologies.

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