Ovo Energy, fresh from its bizarre battle with UK energy regulator Ofgem has proven it has friends in high places after all after it was revealed that former US vice president and climate change campaigner Al Gore invested £8m in the business run by Stephen Fitzpatrick in January this year.
The mezzanine finance deal made through Gore’s sustainable investment fund ‘Generation Investment Management’ has not taken a direct stake in Ovo but instead will “share in its growth over the coming years”. A period for which Fitzpatrick has great plans.
In typically bullish mood Fitzpatrick said:
“The most important thing for us was that we didn’t have to give up any control. We had previously turned down a deal with a private equity investor as we were being asked to give up too much control relative to the stake we were selling.
“We have tripled in size over the past year. We want to go public to raise money to fund new opportunities and to give liquidity to employees with share options.”
Indeed Fitzpatrick underlines that the investment will be used to both develop new products including gas supply as well as to improve its management function in preparation for a planned flotation by 2016.
Whilst to date Gore’s is the largest investment in the business, Fitzpatrick is believed to be planning to raise £25m-£30m from institutional investors in a private listing in order to make good on his promise for Ovo to become a genuine alternative to the Big 6. Fitzpatrick said:
“I am hiring an overqualified team that will be able to take the business through massive growth over the coming years.
“We have also launched new business units, such as our smart meter division, which is currently one of our fastest-growing markets. We could soon be looking at international opportunities, or even new sectors.”
Defending the loss making performance of the business to date however Fitzpatrick said:
“Our revenues are £490m a year. We only planned to break even last year because we wanted to invest everything back into the business and will continue to do so for the next year.
“We’ll be loss-making in 2014 we’re going to spend a lot of money acquiring more new customers. The faster we grow, the greater the net losses.”
Whilst the numbers aren’t in the black yet, the ambition, and external support is there for Fitzpatrick to deliver on his stated aim, Big 6 watch out, Ovo Energy is coming at you, apparently stronger than ever.