At the turn of the millennium, the British energy market was a confusing place for the consumer. People have always wanted to save money, especially on eye-watering energy bills, but few people realised the savings they could make by switching suppliers, and even fewer knew how to go about researching the best deal for them, particularly as there were over 20,000 tariffs to sift through. Price comparison websites are ubiquitous now, but in the early noughties they were an unknown concept. Luckily, George Mountbatten, the 4th Marquis of Milford Haven, was looking for a new business opportunity.
The man behind the company
Cousin to the Queen, direct descendent of Catherine the Great, and keen polo-player, George Mountbatten is also known by the name Lord Milford Haven. His business eye helped him launch uSwitch that he sold in 2006. The idea came to him when he made an investment in a company which went door to door to persuade people to change their energy suppliers. Despite other entrepreneurs being hesitant about investing in online-only businesses, George Mountbatten recognised the increasing number of ordinary people getting online, and how creating an online site would allow people to do this, for free, in the comfort of their own homes.
He teamed up with well-heeled investors, including tech-investor Vip Amin and Andrew Salmon (a former corporate financier at PricewaterhouseCoopers), and changed the landscape of the market forever by founding uSwitch. Taking advantage of increasing deregulation, uSwitch offered consumers a simple to use web portal that compared prices and empowered people to switch supplier to find the best deals. Crucially, the site stripped away the small print and refused to allow supplier advertising, creating a reliable and trustworthy service that made the murky waters of the energy industry much clearer for the average person.
The right time
George Mountbatten and uSwitch swiftly became the go-to price comparison website, thanks to heavy marketing and, particularly in 2005, soaring house bills which saw British families keen to grab a bargain and better manage their outgoings, not to mention the increasing numbers moving from dial-up to broadband, bringing even more people online. In an emailed statement, George Mountbatten said that, “the wonderful thing about uSwitch is that we make money by saving people money.”
Even without the rapid growth in 2005, the company was successful from the beginning, with positive PR surrounding the launch bringing millions to the website from day one. This growth has continued today, with accounts filed by the company for the year ending September 2016, showing profits of £22.8million and sales up 39 per cent to £67million. The idea that deregulation would lead to any one energy provider having a monopoly over the rest of the sector became laughable. uSwitch created an intense contest between energy brands about who could offer the cheapest tariff. The pioneering approach, perfectly timed, shaped not only the energy industry but also inspired a plethora of price comparison websites in multiple other industries.
In 2006, George Mountbatten sold uSwitch to American broadcasting firm EW Scripps for around £210m after long negotiations. It was clear evidence of how keen large media firms were to invest in the internet, and how well he had predicted the importance of the growing online audience. As the recession hit, even more families were keen to tighten their belts, helping uSwitch go from strength to strength.
It’s thought that George Mountbatten secured over £100m in the sale, as he owned just under 50% of the business. Roughly £19m (9% of the proceeds) from the sale was shared between managers and staff. It is estimated that uSwitch has saved consumers millions of pounds.