Bulb Energy
Britain's fast-growing green energy supplier: rescued by the state after the 2021 gas shock
- Founded
- 2013
- Closed
- 2022
- Lifespan
- 9 years
- Country
- United Kingdom
- City
- London
- Sector
- Energy and climate
- Founders
- Hayden Wood, Amit Gudka
- Investors
- DST Global, Magnetar Capital, JamJar Investments
- At its peak
- About 1.7 million customers in 2021; reported to be worth GBP 400 million to GBP 500 million in 2018
- Cause of closure
- Macroeconomic crisis
What did it do?
Bulb was a UK energy supplier that sold households renewable-sourced electricity. Amit Gudka, a former energy trader, and Hayden Wood, a management consultant, founded it in London in 2013. It started on the founders' savings and JamJar Investments, and raised GBP 60 million from DST Global and Magnetar Capital in August 2018. By November 2021 it had reached about 1.7 million customers.
Why did it shut down?
When gas prices climbed quickly in 2021, Bulb came under pressure and sought a bailout in September 2021. Its investors refused further funding. Ofgem judged the company too large to spread its customers among other suppliers, and on 24 November 2021 Bulb became the first UK energy company to enter special administration. The sale process began in February 2022, Octopus was chosen in October 2022 and the transfer finished on 21 December 2022. According to the National Audit Office, the estimated cost to the taxpayer stood at GBP 3.02 billion in January 2023, most of it expected to be recovered from Octopus.
The story
Amit Gudka had been an energy trader and Hayden Wood a management consultant. In 2013 they set up a simple supplier in London selling renewable electricity. The first money came from their own savings and JamJar.
In August 2018 GBP 60 million came from DST Global and Magnetar, with the company reported to be worth GBP 400 million to GBP 500 million. Customer numbers rose quickly and reached about 1.7 million by November 2021.
In 2021 gas prices shot up. In September Bulb sought a bailout and investors refused more funding. Ofgem judged the company too big for its customers to be shared out. On 24 November 2021 Bulb became the first UK energy company to enter special administration.
The state kept it running for a year. Octopus was chosen in October 2022, and about 1.5 million customers moved across on 21 December 2022. The National Audit Office estimated the cost at GBP 3.02 billion for January 2023.
Lessons for founders
- If you sell at fixed prices and buy your input on the market, the gap is your risk: the 2021 gas shock showed that within months. Protect against price risk before you grow.
- Fast customer growth does not strengthen the balance sheet: 1.7 million customers did not stop the search for a bailout in September 2021. Plan a capital buffer alongside your growth target.
- Do not assume investors will step in at the last moment: when more funding was refused, control left the company. Agree who will write a cheque, and for how much, before you are squeezed.
Sources
- Investigation into Bulb Energy (National Audit Office, 2023-03-29)
- Octopus completes Bulb Energy takeover after year-long saga (City AM, 2022-12-21)
- Bulb Energy (Wikipedia)
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