What You Can Learn from Rebel Energy’s £100M Growth With Penelope Hope

Full Transcript

Jason Kirby: Everyone, welcome back to today’s show. Today we have Penelope Hope with us, founder of Rebel Energy. She raised only a million and a half and got to over a hundred million in revenue in a very short period of time. Penelope, welcome to the show.

Penelope: Thanks, Jason. It’s a real pleasure to be here.

Jason Kirby: I’m excited to have you on. I don’t get to talk to UK founders as often as I would like. And you’re quite the success story with your company, Rebel Energy. And I think it’d be great for you just to tell the audience a little bit about what is Rebel Energy.

Penelope: Thanks so much, Jason. So five years ago, I co-founded a renewable energy supplier. And that’s a business like a British Gas or an Octopus, or perhaps you have a US example that your followers might understand. Essentially, we’re buying energy and supplying it to customers. In our case, that’s renewable energy, and we also have a social mission to alleviate fuel poverty, which is part of our work. So yeah, really great business and I’m delighted to have been a part of it.

Jason Kirby: I want you to tell the audience a little bit about the early days and why you decided to raise one and a half million pounds to get it off the ground.

Penelope: When I look back at it now, I can’t understand how we managed to do it with £1.5 million. My co-founder had a concept for a new energy supplier and left his job and wrote a business plan. I came alongside him to finesse that into a purchasable and distinctive opportunity for an investor and a consumer. The money we raised initially paid for us as a team to start to build the backend processes—our head of ops did that. To build high-level partnerships—my co-founder did that. And to put together the investor case—which was my responsibility. We took that out to investors. With that money, we were able to start building those backend operational processes, build the team, define the brand, carve out our market niche, and, of course, take it to market.

Jason Kirby: What was the fundraising process like? It sounded like you pretty much just had a business plan. When you came to thinking you needed only a million and a half pounds to get to where you thought you needed to go, who did you approach and what was your fundraising strategy?

Penelope: We had a cornerstone investment from an investor in the States for about £200,000. That paid for Dan, myself and our head of ops to get started on the business. We then went out to an angel group in the UK and raised a further ~£800,000 from about 30 business angels, most of whom had been entrepreneurs or business owners. Those were tickets ranging from £25k to £50k. Then—though I wasn’t excited about this part—it turned out to be super successful and really positive for the business: we did a CrowdCube raise of about £500,000. We had more than 700 investors; it was hugely oversubscribed. People invested from as little as £10 up to £25,000, which made it accessible. Many of those people came on board as our beta testers and initial customers when we started stress-testing our systems. It was a nice blend of raising from different sources and they’ve been tremendously supportive.

Jason Kirby: This is fascinating to me. So no institutional capital—and you grew this company to over $100 million in revenue. You raised about a million from business angels and a market investor in the US. How did you get the US investor? Was that a personal relationship, or did you try to go and get an investor from the US specifically?

Penelope: It was a personal relationship to my co-founder Dan, and he very intelligently kept this person in the loop from the earliest phases of ideating and conceptualising what the business would be. This person felt part of the journey from inception. There’s a nice lesson there about treating an investor—incorporate them in the thinking and involve them from the earliest possible point.

Jason Kirby: How long did it take to shop this around to angels and herd 30 angels together to participate?

Penelope: We had help from our angel network, who were phenomenal at herding the cats. We did an hour’s pitch online, Dan and I, and took them in detail through our deck and the investment case for exposure to the energy transition and our place within it as a supplier. The leaders of the investment group called around the angels; those that expressed interest had one-to-one calls with us. Then it was up to us to go through AML, shareholders’ agreements, term sheets, and sign them up.

Jason Kirby: How long did that take from being approved to pitch to having them all close and sign?

Penelope: About six months. And we didn’t wait to close the round to start using the money and building the company—which is bold, but necessary. Speed is of the essence in getting a company like this to market.

Jason Kirby: Was it a SAFE, a convertible note, or a priced round?

Penelope: No convertible notes. I’m not quite sure what you mean by SAFE. It was a priced round with ordinary shares and the usual voting and pre-emption rights.

Jason Kirby: And with the crowdfunding round—for the American audience, that’s like a WeFunder or StartEngine. You used CrowdCube. Raising 500K through that, when did you decide to do the crowdfunding round and how long did it take to get that money in?

Penelope: We did the angel pitch in September 2020 and in January 2021 we kicked off the crowdfunding pitch. Dan really wanted to do it; I was reluctant because I’d always raised in very private, discreet settings and was shy about going on the internet and recording a video. But it was a wonderful idea. It was a lot of work because, quite rightly, they have questions and those have to be answered correctly. It proved really successful and it was wonderful to have support from so many different people—the kinds of people we wouldn’t otherwise have had on our cap table.

Jason Kirby: For context, it’s a very direct-to-consumer business. In the UK, energy is fragmented and competitive, whereas in the US it’s often monopolistic. Getting money from what could be your customers creates engagement—beta testers and early signups. Great strategy. How long from deciding to go live to closing? You said ~700 investors participated in your CrowdCube campaign.

Penelope: When the campaign goes live, it’s really only a number of weeks—about four from memory. The weight of the crowd proliferates and compounds as the raise nears its close. In the last 24 hours, that’s when everyone starts jumping in—it’s quite exhilarating.

Jason Kirby: Where were you in terms of traction when you went live on CrowdCube?

Penelope: We were pre-market launch, so no customers. The CrowdCube closed in spring 2021, and two or three months after that we started putting ourselves and our team on our supply—very early beta testers to check we could get out a bill and the systems were working. Over the summer we had about 300 beta testers on supply. It wasn’t until the following year that we entered the market proper and started scaling.

Jason Kirby: Walk me through the growth strategy. To launch then get to where you are in terms of revenue so quickly—what was the secret sauce? What was your team doing?

Penelope: First, understand an energy supplier is a utilities business. A consumer must have your product—electricity, heat, light, telephony, internet, water. You have a captive audience. It’s not about convincing them they need energy; it’s about convincing them you are better than a competitor. With many businesses it can take a long time to go from startup to scale-up. With an energy supplier, you open sales channels with partners. For example, comparison sites like YouSwitch or GoCompare have volumes of customers every day waiting to choose a supplier. It’s less about acquiring customers and more about retaining them. People are price-sensitive; many use platforms that automatically switch if there’s a better deal elsewhere. So scaling is about onboarding securely, making sure the operational systems work, and serving customers properly so they’re not calling with complaints.

Jason Kirby: On pricing energy commodities in the UK—how is it not a race to the bottom among competitors?

Penelope: It can be, and many competitors fell foul during the “winter of discontent” of 2021 into 2022 when wholesale prices spiked more than ever. The way to compete is at operational margin. Unless you have power purchase agreements with generators, most suppliers buy wholesale and are exposed to the same prices. We competed at the operational level through robotic process automation—what might be called AI now. There are about 500 backend processes that let an energy supplier run—the onboarding process is an obvious one. We automated all of those from the get-go. Many incumbents had people doing them manually. That protected margin. We’ve been profitable in every month of trading. Year one EBITDA margin was about 11%, which is unheard of in our sector where many struggle to cover costs.

Jason Kirby: So you raised £1.5M—what’s the next round? Or did profitability remove the need to raise?

Penelope: We’ve been profitable in every month of trading. I’ve always had a deep commitment to organic growth—that’s what I was taught as a young equity analyst. Equity is in very safe hands when it’s in the founders’ hands—we have the social and environmental mission at heart and the company’s best strategic interests at heart as well. The modern way is often to raise big, and while I respect that, if you don’t need to, why would you?

Jason Kirby: You got to a very respectable scale quickly. It’s 2024 and you launched this and weren’t generating revenue at the start of 2021. Impressive growth. You’ve also recently stepped down and pursued other roles or opportunities. With that rocket ship, why step back?

Penelope: As a utilities business we hit that inflection point quickly—from startup to scale-up. The strategic and creative challenge changes overnight. In startup mode, the question is “How on earth do we build this company?” In scale-up, it’s “How do we add another thousand customers?” Both phases require great skill. My skills are more suited to the startup phase—that’s my forte. Being a founder is about laying the foundations; if you do that well, you pave the way for high-quality growth in the years to come.

Jason Kirby: Looking back at your success with Rebel, would you change anything?

Penelope: No, I don’t think so. It was a sort of holy chaos—very challenging and requiring an enormous amount of hard work and sacrifice, as any big initiative does. Sometimes I wonder if raising more money would have made it easier or more comfortable. But I don’t think that’s the point of starting a company. I heard a great definition: being an entrepreneur is spending a few years of your life living as most people won’t, so you can spend the rest of your life living as most people can’t. Those prepared to be very uncomfortable will reap the reward.

Jason Kirby: When you advise founders today, what’s your advice on fundraising—given your angel round and crowdfunding experience?

Penelope: I find myself telling founders again and again: you’re not here to articulate what a good business you have; you’re here to articulate what a good investment you have. Decks often shout about how brilliant the product is, but as an investor I want to know how that translates into a return. Exciting businesses aren’t always good investments; “boring” businesses can be if they produce steady, sustainable, long-term results. Think through the investor’s eyes: why would they want exposure to your industry, let alone your specific business? Have you applied five- and ten-year forward multiples to conservative, moderate and aggressive forecasts to show potential outcomes so they can contextualise it in their portfolios? Treat it as investment analysis, not hype.

Jason Kirby: The US risk tolerance is higher; the UK is more pragmatic. With that mindset, where’s the opportunity for UK startups raising money? Where are the gaps?

Penelope: I go to a lot of pitches—see a lot in FinTech, technology and AI. Retail businesses are often written off before they’re considered—DTC products like a moisturiser need a lot of backing to take share. The opportunity in the UK is access to cheap product testing via no-code and prototyping. It’s inexpensive to build something and test it with very little investment. My first recourse is to self-fund or take as little capital as possible to generate as much return as possible—capital efficiency matters because we want to own our businesses. There’s also the tax-efficient environment—SEIS and EIS are a godsend. The administrative and legal environment is strong; you can get things processed quickly here. And there are good founder networks in London and regional cities. The opportunity is in the environment we have.

Jason Kirby: Some UK founders compare themselves to the US, but they’re different markets. The UK is big enough for most businesses; compared to parts of the EU—Germany’s legal setup can be a nightmare for setting up a business.

Penelope: I’d encourage founders in the UK. It’s about £50 to incorporate on Companies House and it takes minutes; in the States you have to pay a few grand. SEIS is extraordinarily tax-efficient. Comparison is the thief of joy—let’s not go down that route. One thing I’d love to see more of in the UK that the States—especially the Valley—does well: more VCs run by exited founders. More than half, I’d say, in the Valley are run by former entrepreneurs. Their lens is entirely different to someone who hasn’t done it. They’re quicker at identifying someone capable of doing the same. I’d love to see more founder-created VCs in the UK.

Jason Kirby: Is it too much traditional finance in VC here in the UK?

Penelope: It is traditional. One possible explanation is a non-diverse thought environment. A Diversity VC report showed about 7–9% of UK adults have been privately educated, but more than 70% of VC partners have. Private schools often instil protecting tradition; entrepreneurship is about disruptive innovation. So disruptors are going to protective traditionalists to ask for money—that’s not ideal. We need far more diversified VCs; the gender stats are poor too. We need a more egalitarian environment to recognise talent when it arrives, rather than straining it through a deeply conservative and analytical framework.

Jason Kirby: I agree. But pushing back slightly—you advised founders to be analytical in their pitch, yet you’re calling for VCs to be less traditional. How should founders navigate that paradox?

Penelope: We should all have our investor hat on. Founders are investors in their own equity. We must show a demonstrable path to revenue and profitability ASAP and articulate it clearly and cogently. Accept that the VC environment is how it is now, and demonstrate returns. But also bring dynamism and creativity—know when to turn it on and who it resonates with. Angel groups, being business owners, ask phenomenally pragmatic questions—very different to VCs. Crowdfunding is more “pop-tastic,” consumer-facing. Dial up and down the qualities to match the investor type. That’s about respect.

Jason Kirby: Last question—access. If VC skews conservative, how do founders get access and the opportunity to present?

Penelope: Of course warm introductions help, but everyone has access to networking. You should network like it’s your job. Use Eventbrite and Google to find founder groups, VC networking events, even private equity events. It’s impossible to go to a networking event and not be invited to another—there’s a lot online and on LinkedIn. London has an incredible conference circuit and we’re on the tip of Europe. Work really hard to make connections and maintain relationships. The best time to raise is when you don’t need money—send updates showing you did what you said you would. It creates a different dynamic. Network like it’s your job.

Jason Kirby: Penelope, it’s been amazing having you share your insights, especially the UK perspective. If founders or listeners want to get in touch or learn more, what’s the best way?

Penelope: LinkedIn, please.

Jason Kirby: Perfect—we’ll add that in the description. Penelope, thank you so much for being on the show. I look forward to our audience hearing what you have to say.

Penelope: Thanks so much, Jason. Bye now.