How these two energy companies drove explosive revenue growth

Octopus Energy

In less than 10 years, founder and CEO Greg Jackson has powered Octopus Energy from plucky green start-up into the UK’s largest domestic energy supplier.

There are now almost 13 million household meters measuring electricity and gas served by Octopus, analysis by Cornwall Insights has found. This works out at almost a quarter of the market and a touch above British Gas, until now the dominant player.

Jackson, a member of Greenpeace since his mid-teens, initially set up and ran businesses making mirrors and trading property. He did not start Octopus until his early 40s.

“We became Britain’s biggest energy supplier by relentlessly delivering better services, lower costs and more innovation,” Jackson says. “We’ve invested heavily in technology to deliver this rare combination of rapid growth and outstanding service.”

Raising hundreds of millions in capital from investors, including former US vice-president Al Gore, is a critical part of the Octopus story. This gave Jackson the financial firepower for a succession of game-changing acquisitions that were also partly made possible due to the energy crisis that began when Russian President Vladimir Putin launched the full-scale invasion of Ukraine in early 2022.

Later that year, Octopus was able to snap up Bulb, until then the UK’s seventh largest supplier with 1.5 million customers. A year later, the company bought Shell Energy Retail, the fuel giant’s UK household electricity and gas arm. This brought in another 1.3 million customers.

Octopus’s tentacles have also spread overseas by buying German green energy outfit 4hundred and France’s Plüm Énergie. Jackson now runs a group operating across 26 countries. Annual turnover has ballooned to £15.4bn, up almost 525 per cent in two years.

Ovo Energy

Stephen Fitzpatrick set up Ovo in 2009 with a vision to shake up the UK’s domestic energy market, then long dominated by six large players.

It must have seemed quite the gamble. The son of a Belfast grocer, Fitzpatrick had until then been working in investment banking and his entrepreneurial endeavours were largely limited to a property freesheet he ran while studying at Edinburgh University.

Nevertheless, he and his then wife Sophie sold their home and used £350,000 of the proceeds to set up their Bristol-based green energy supplier.

It took 11 years before they hit the big time. Shortly before the Covid pandemic began, Ovo bought FTSE 100 giant SSE’s domestic energy business for £500m. The acquisition saw Fitzpatrick’s customer base leap from 1.5m to 5m – and suddenly Ovo was the UK’s third largest energy supplier.

“He went from David to Goliath with one deal,” one industry chief executive says of Fitzpatrick.

Although now overtaken by fellow new market entrant Octopus, Ovo’s revenues have continued to rise, partly due to the recent energy crisis. Over the past three years, sales growth is up 750 per cent, with annual profits exceeding £1bn. Fitzpatrick still controls the company, despite selling stakes to Mitsubishi Corporation, Mayfair Equity Partners and Morgan Stanley Investment Management.

A long-term admirer of Sir Richard Branson, Fitzpatrick shares the Virgin billionaire’s eclectic mix of entrepreneurial pursuits. The Ulsterman has floated his flying taxi venture Vertical Aerospace on the New York stock exchange and once dabbled in Formula One. He has also bought Kensington Roof Gardens, a famous London nightspot previously owned by Branson.