Every week, Charlie Conchie sits down with the biggest movers and shakers in financial services, tech and fintech. This week, it’s Octopus Group co-founder and CEO, Simon Rogerson.
“The funny thing is,” Simon Rogerson laughs at his office in Holborn, “when I say I work at Octopus, everyone assumes I work for an energy company.”
The fact his sprawling Octopus Group plays second fiddle to one of its subsidiaries might irk some founders. Say ‘Octopus’ and most people think of Greg Jackson and his brightly coloured energy challenger, which has shaken up the market in the UK and was spun off from the wider octopus Group in 2022
Rogerson, however, says he’s a man who likes to eschew the limelight. Save for a brief interview last year, he’s rarely appeared in the press over the past decade despite building a company which stretches its tentacles across everything from fund management to education and divorce mediation.
We’re speaking in the room where he first met Jackson in 2015, a man he said was “bleeding energy all over the table”. And you get the sense he’d like to be chatting about that rather than himself.
“I love talking about Octopus, but I’m very nervous talking about me,” he says. “With my therapist, I’m very happy to talk about this.”
‘It knocks the entitlement out of you”
Octopus’s origins are a tale straight out of the entrepreneurial playbook: three friends, too naive to realise the difficulty of what they were doing, setting up shop in a dingy room shared with a TV rental company above a Costcutter in Farringdon.
He and his co-founders spent nine months poring over the Yellow Pages, cold calling every name they could find in a bid to raise a quarter of a million pounds for an initial early stage venture capital fund.
“In hindsight, that was amazing, because it knocks any kind of sense of entitlement out of you,” he says. “It removes softness, and you recognize how difficult it is actually to scale a business.”
Scale, though, has become the company’s stock in trade in the two decades since then. Octopus has become something of a conglomerate outside the traditional mould. Under the umbrella sit Octopus Energy and a financial services arm which includes Money, Investments, Legacy – which helps people plan for death and “find support after loss” – and a divorce mediation business, Amicable, set up after his own bruising experience with lawyers.
Its third division, Aurora Group, runs specialised supported schools.
Octopus Group has a tentacle in everything from fund management to wind generation
It could seem an incoherent collection of industries, but he insists one thread runs through them all: they’re broken.
“At the time we set up, financial services was the least trusted industry in the world,” Rogerson adds.
“Fast forward 24-25 years later, it’s still the least trusted industry in the world. The second least trusted industry in the world is energy, and I happen to think the education sector is broken. Those are the three areas the group plays in.”
It’s not always a lucrative task to tackle. Economic shocks and the separation of Octopus Energy in 2022 pushed the company to a £10m loss last year and triggered a crash in revenues after a profit of £184m the previous year.
Its fund management arm now holds around £10.5bn on behalf of its investors, up around £200m on the previous year but a slide from £12.6bn in 2019.
When companies are on the wrong side of things repeatedly, you tend not to trust them.
Rogerson meanwhile makes more of the group’s mission than its balance sheet, and instead hammers home its status as a B-Corp. But even he admits the ‘purpose over profit’ pitch to customers has become a harder one to make..
The B-Corp label alone has come under fire as firms with dubious track records win accreditation. Media agency Havas was recently booted out after winning a multi-million-dollar account with Shell and the granting of B-Corp status to Nespresso triggered an internal revolt. Divisive pale ale maker Brewdog has similarly been stripped of its title.
Another resurgence in corporate cynicism seems to have reared its head. So does the average person really think that businesses can act on their behalf?
“People are cynical born out of their own experience,” he says. “So when [companies] are on the wrong side of things repeatedly, you tend not to trust them.”
It’s an ethos that informs the future direction of Octopus too. He insists it will remain a private company in perpetuity and will steer clear of the public markets due to the narrow premium placed on profit by investors.
“It means I don’t spend my time going around to investors saying, ‘here’s what we’ve decided to do’,” he says. “I want to spend my time growing the business, not reporting on it to other people.
Octopus Group helped spawn Greg Jackson’s Octopus Energy. Photographer: Chris Ratcliffe/Bloomberg via Getty Images
Rather than courting investors, Rogerson says he looks at the people working for him.
All his staff are given a report card on their performance – one ranking their output and the other their behaviour – which helps separate the “radiators” from the “drains”.
In his interviews, he quizzes staff on what companies they’d most like to be friends and what makes them vulnerable.
“Vulnerability is a massive strength,” he adds. “To be able to say, ‘do you know what, I find this very difficult, or this is the challenge’.”
The firm has also set up an internal incubator of sorts, in which staff can walk in and begin pitching business ideas at Rogerson in the hope of winning funding from Octopus’s own balance sheet.
“If you’re successful, we’ll set you free, and you can go up and build it, and that’ll be amazing for you. Good for you,” he says.
“If you fail [within 9-12 months], you’ll get your old job back, you just come back and work for us again.”
‘Entrepreneurship and entrepreneurs are the agents of change’
It’s not for everyone. Unlike some, he says entrepreneurship can’t be taught and is a route many would do better to avoid.
“If it was a disease, it would be the most feared disease in the world, because 99.9 per cent of people die who undertake it.”
Even so, he insists the UK has retained its status as a hub for budding founders and the new government “understands it”.
“If you want to build a thriving, innovative economy that creates jobs you need money channel towards very early stage companies,” he says.
And it’s those firms, rather than any Westminster directives, that will tackle the issues he wants to fix.
“Companies have all the capital, human capital and financial capital, and that’s the opportunity,” he says. “That’s why entrepreneurship and entrepreneurs, are the agents of change.”