Igloo Energy will use Osaka Gas’ expertise in low-carbon heating to continue its expansion into the heat pump market, its chief executive has told Utility Week.
The challenger brand, which was launched in 2017, announced Osaka had invested “up to £20 million” for a minority stake in the business on Tuesday (10 December).
Speaking to Utility Week Matt Clemow, Igloo’s chief executive, revealed that the initial investment from Osaka is £3.5 million for a 7.4 per cent stake in the company, valuing Igloo at £45 million.
Clemow added that the latest investment will increase over time to 30 per cent as both businesses continue to grow.
In January this year, the company offered a 3.65 per cent stake when it set out to raise £500,000 in crowdfunding. At that point the company, which had recorded revenue of £25 million in its most recent financial year, was valued at £13.2 million. However, since then it says its customer numbers have grown from 20,000 to 85,000.
The Igloo boss, who said his company was moving “strongly” into the heat pump market, explained that Osaka was one of the world’s largest installers of micro combined heat and power (MCHP) boilers and that it has installed more than 400,000 units on its network in Japan.
Clemow said: “One of the things that has been a really important and valuable part of the partnering perspective is that they can bring some of that expertise on using less traditional means of heating homes which were obviously significantly lower carbon and significantly better on cost benefit for the consumer.”
Osaka, which serves more than 6 million customers in Japan, already has a 50 per cent stake in UK firm SES Water, which it purchased in 2013.
He added: “They have got a very strong interest and great capability in Japan.
“In the UK they have got some capability through SES in the home services market. This is about how you can take those products and help provide customers with a much more personalised approach to how they should heat their home.”
Speaking yesterday Eiji Natsuaki, associate director of Osaka Gas UK, said: “With the prospect of great demand growth in this area, we look forward to participating in Igloo Energy’s strategy to develop and roll out new services related to demand side energy flexibility.
“Through the collaboration with Igloo Energy in the household energy supply business in the UK, we aim to enhance our expertise in business operation and new services development in an advanced energy market to expedite our business expansion in the field of demand side energy flexibility.”