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· Posted on
May 10, 2024

Origin Energy makes $410 million from its investment in Octopus Energy... and that's what we call an electrifying return

Origin is reaping some of the rewards of this investment with Octopus Energy which is now worth nearly $410 million on paper.

What's the key learning?

  • Origin saw an enormous synergy with Octopus because it wanted access to its AI-enabled energy tech platform… exclusively.
  • And long story short this helps Origin Energy offer a better service for its customers.
  • But now, Origin’s investment in Octopus is also worth over $3 billion.. Or nearly 18% of Origin’s total market value.

👉 Background: Origin Energy is the largest electricity and gas provider in Australia with over 4.2 million electricity customers around Australia.

👉 What happened: Back in May 2020, Origin Energy first invested in UK based clean energy provider Octopus Energy. Since then, it has built up a stake of more than 22% of the company.

👉 What else: Now, Origin is reaping some of the rewards of this investment. Octopus Energy has received a new investment, with a 15% uplift from its previous valuation, set only 6 months ago. This means Origin Energy's stake is now worth nearly $410 million on paper and growing into a key part of its business.

What's the key learning?

💡With the right investment, the sidekick can sometimes become the hero.

💡When an incumbent in an industry invests in a plucky startup, it can lead to enormous synergies and even become a core part of the investing company’s overall value, like Octopus Energy with Origin.

💡Origin isn’t the first company to see one of its smaller, tech investments turn into a core part of its business. Remember when News Corp took a 44% stake in realestate.com.au back in 2001 for $2 million. That investment now worth $14 billion and is a core part of News Corp's business.

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