Diversified trading group Mitsubishi Corporation acquired a 20% stake in UK-based sustainable energy provider Ovo Energy today, at a valuation reported by the Financial Times to be about £1bn ($1.28bn).
Founded in 2009, Ovo runs a digital energy retail business with 1.5 million customers across the UK and Germany, eschewing coal and nuclear power, generating a minimum of 33% of its energy from renewables sources.
The company also produces and sells hardware products such as home electric vehicle (EV) chargers and domestic energy storage systems, and the funding will support the growth of Kaluza, its intelligent energy hardware division.
Ovo founder and CEO Stephen Fitzpatrick told the FT the capital will also fund its entry into France, Spain and Australia this year, and revealed that he maintains a majority stake in the company post-investment.
Mitsubishi owns more than 6.2 GW of energy capacity worldwide as well as lithium-ion battery and energy trading assets, and said in a statement it intends to help the company with its international expansion.
Stephen Fitzpatrick, Ovo’s founder and chief executive, said: “The costs of EVs, battery storage and wind and solar power have fallen dramatically in recent years, but it’s becoming increasingly complex to integrate them onto the grid.
“To succeed, we will need to develop new technology and redesign the energy system around the customer. We want to be at the forefront of that global, tech-enabled transition to a zero carbon energy system. This investment from Mitsubishi Corporation will help us get there.”
Oyo retained Greentech Capital Advisors as financial adviser for the transaction. Its existing investors include private equity firm Mayfair Equity Partners, which paid approximately $48m for a 15% stake in the company in 2015.
