Octopus Energy’s pinball wizard on top of his game

Early in our lunch I ask Greg Jackson whether he considers Octopus Energy a technology company or an energy provider. “Good ideas come to you multiple times. So sometimes you’d see it from the tech angle, sometimes from the customer experience, sometimes from the environment,” he tells me.
Yet it soon becomes clear he has a much greater affinity with the hard-driving founders of the tech world than his contemporaries in the electricity and gas supply industry.
“Many of the world’s best tech companies, or reputed to be tech, are really customer companies,” he says. “Apple’s a tech company but the real magic was they understood customers better than anyone else … And I think we were the same. I think we’re really a customer company.”
In an industry that has become synonymous with long call-waiting times, confusing pricing and incorrect billing, it is understandable that Jackson might want to dissociate from the supply market.
Yet the use of sleeker tech has made Octopus Energy, which Jackson set up alongside James Eddison, his business partner, almost a decade ago, genuinely mould-breaking. Its engine is the Kraken account platform, which manages everything from customer service to capturing a real-time picture of a customer’s consumption to encourage them to use energy when it is cheapest.
Licensed to competitors including Eon and EDF, the technology now underpins about half of the UK’s household supply. Octopus itself has more than 7 million customers in the UK and in international markets including Germany, France and Japan.
We meet early on a Friday afternoon at Bar Shu, a stone’s throw from London’s Chinatown, on a corner of Soho. The low-key restaurant specialises in Jackson’s favourite cuisine from Sichuan, a province in southwest China.
The food is distinct for its use of Sichuan pepper, which induces a phenomenon called paraesthesia, a tingling, numbing sensation. “So if you’ve never had it and you’re open to being a bit adventurous even at lunchtime, there’ll be an experience you’ve never had before,” he says with characteristic vim.
Bar Shu was one of the first in London to specialise in the cuisine. It might not pack the same punch as the fare he sampled in China, but it “is good”.
Since Jackson, 53, is a regular and I’m a novice, he offers to do the ordering. He opts for an array of dishes to share: sliced sea bass and prawns, both cooked in Sichuan chillies, chicken piled with chillies and cooler sides of smacked cucumber salad and black fungus, along with a cooling Coke Zero.
Octopus Energy was inspired partly by Jackson’s frustration with the poor customer service offered by his own energy supplier. “The observation from the outside was when you deal with energy companies, you’d always get put on hold, then moved to another department, and they’re always making mistakes on billing,” he recalls.
A lot of the blame can be pinned on the outdated systems a lot of the incumbents are running on, as he sees it. Fix those and you make fewer billing mistakes, leave customers on hold for less time and ultimately cut your operating costs.
After realising that the venture would require £10 million in start-up capital, Jackson and Eddison shelved the idea. A meeting with Simon Rogerson, the co-founder of Octopus Group — the investment firm that had backed Zoopla, Secret Escapes and solar farms — in 2015 changed things. Octopus, initially named Positive Energy before the pink, cuddly branding came along, was born.
Since then, the company has gone from inconspicuous challenger to the UK’s second-largest electricity and gas supplier. Acquisitions have helped, including the state-backed takeover of Bulb, which brought with it 1.5 million customers.
The deal was met with a legal challenge by rivals including British Gas, which claimed that the structure of the transaction unfairly favoured Octopus by offering the company a £3 billion loan to compensate for the purchase of energy for Bulb’s customers. The case was later dismissed and Octopus repaid the loan in full.
The business is a rare success story among the upstarts that emerged in an effort to break the stranglehold of the “big six” a decade ago. Since then, the energy industry has come full circle. The wave of supplier failures that started in late 2021 has pushed out many of the smaller challengers and left the market more tightly consolidated once again in the hands of a few larger operators.
What does all that mean for competition in the market as energy bills remain hundreds of pounds a year higher than before the crisis? “It’s a completely false idea that competition is dozens of identikit companies that pile it high, sell it cheap, and pack up when the going gets tough,” he insists.
“We thought the supermarket sector was competitive and then Aldi and Lidl turned up.None of us worry about the number of big supermarkets. What we see is that tremendous competition. And that’s what has happened in energy. It’s not back to the big six.Octopus is fundamentally different.”
The food has swiftly arrived. The crunchy chicken is generously piled with chillies and the famous peppers, which you are meant to avoid eating, however tricky. “Grab one of those before you’ve lost your taste buds because it’s so good,” he tells me. Most impressive is the whole roasted sea bass, which is laden with green and red chopped chillies, lotus flower and coated in spices.
A big part of the blame for higher energy bills lies further back up the energy system, he argues, and the wholesale market that should be reformed. “The reason your bill is at £1,700 rather than hundreds of pounds lower is the amount of bloated cost in the supply chain.”
The case for so-called regional pricing is a particular drum that Jackson likes to beat. At present the price of electricity is set nationally every half an hour. Proposals had been put forward by the previous government to split the market so that prices differ by region. The idea is that the offer of cheaper energy would make building solar and wind farms in the south an easier sell to locals and help alleviate bottlenecks on the outdated grid.
“That means that very often the national price is set by the supply constraints in London,” he says, as he expertly chopsticks away. “And everyone in the country ends up paying London prices for electricity. It’s the same as having to pay London prices for housing. It’s mad.”
He is an advocate for green energy, in which Octopus invests directly, but if the energy is wasted and wind farms are being paid to switch off, then “there’s no point”.
Born in Germany where his army dad was stationed, Jackson was raised in Saltburn-by-the-Sea, a town in the northeast of England, after his parents split up, along with his two siblings. He traces an inventive streak back to his teenage years. After learning to do “some pretty hardcore coding”, he left school at 16 to write a video game. When the game didn’t sell, he returned to sixth form and won a place to study economics at Cambridge University.
After a brief stint in the marketing department of Procter & Gamble, he cycled through several start-ups: a mirror manufacturer, direct mail companies and then an enterprise software company, where the idea first struck for the platform that would eventually become Kraken. Octopus was a type of “demo client” for the system.
It’s rare he has an evening without some sort of commitment. Does he have time to fit much else in? When he’s not with his two sons, time he guards carefully, he likes to play pinball, he tells me. He owns two of the retro games machines.
Despite the rapid pace at which it has taken market share, Octopus generated its first pre-tax profit, of £283 million, only last year. “Although we’re big in the UK, our growth as an energy company around the world, and in driving technology, is still in the very early days”.
Backing from heavyweight investors, including the Canada Pension Plan Investment Board and Calpers, America’s largest public pension fund, has followed, while Jackson retains a 5 per cent stake. At last count the company had a valuation of $9 billion, or £7 billion, which would easily earn it a place in the FTSE 100.
Might an IPO be on the cards? “We’ve definitely got no plans,” he says.
“We’ve achieved a lot and I’m really proud of all of that, but also realistic, that one day the shareholders might tap me on the shoulder and let me know it’s time for someone else. And I think being comfortable that that might happen one day enables me to focus on what we do.”
But it’s hard to believe that Jackson would be happy to hand over the reins any time soon.
Age: 53
Education: Huntcliff school, Saltburn-by-the-Sea; Cambridge University (BA, Economics)
Career: 1994 assistant brand manager at Procter & Gamble; 2003 CEO of the software business C360, later acquired by Tangent; 2006 director of online strategy at Tangent; 2013 founder and CEO of HomeServe Alliance, home emergency repairs and improvement business; 2015 co-founder of Consultant Connect, healthcare tech business; 2015 founder and CEO of Octopus Energy
Family: Two sons
Smacked cucumbers: £9.50Cloud-ear fungus: £8.50Stirfried prawns: £26.90Seabass with sizzling spices: £39.90Fragrant chicken in chillies: £28.902 x Coke Zero: £7.801 x ginger ale: £3.90Still mineral water: £4.90Service: £16.30Total: £147