These smug eco-hipsters’ failed energy firm Bulb has cost British taxpayers £6.5billion… so, GUY ADAMS asks, how DID they both walk away with millions?
On a tree-lined street near London Fields, a fashionable park known as our capital city’s ‘Hipster Hub’, is the mansion that Bulb Energy built.
Spread over four high-ceilinged floors, the imposing brick property was snapped up by the firm’s founder, Hayden Wood, in 2018, when it boasted no fewer than eight bedrooms, five bathrooms and a self-contained granny annexe.
Wood paid around £2.5 million in cash for the building’s freehold, before hiring architects to design a single dream home for him to share with advertising executive wife Flora and their infant daughter, Iris.
Little expense was spared in then gutting the property and building a large extension.
As a result, the Woods now enjoy the use of a swanky ‘garden room’, study and double-size master bedroom. Brand new sash windows are painted a fashionable shade of black. A shiny Tesla sits on their gravel drive.
But today, somebody else is paying for the domestic bliss that this well-heeled couple enjoy among the yoga studios, organic supermarkets and boutique coffee shops of Britain’s hippest postcode.
That somebody is . . . you and me!
Wood (right) wasn’t the only one who did very well indeed out of the company, either: his slick business partner Amit Gudka (left), a part-time grime and dubstep DJ, flogged £4 million-worth of shares at the same time
The reason lies in the way Wood acquired the millions he has poured into his stonking great mansion.
For roughly three months before he splashed out on the designer home, the 38-year-old entrepreneur had sold a tranche of shares in Bulb, a modish electricity and gas supply firm he founded in 2015.
This transaction was previously reported to have netted him £4 million. However, I can today reveal that the actual figure was £4.5 million.
Wood wasn’t the only one who did very well indeed out of the company, either: his slick business partner Amit Gudka, a part-time grime and dubstep DJ, flogged £4 million-worth of shares at the same time.
There would be nothing very wrong with that, were it not for one awkward fact. While the duo did remarkably well out of their involvement with Bulb, the British taxpayer did not. Quite the reverse, actually.
Shamefully, given the millions they extracted, Wood and Gudka’s stewardship of the firm has instead cost the Exchequer billions.
To blame is a harsh reality: under Wood’s seven-year reign, Bulb Energy never made a profit. Instead, it built up significant debts before finding itself facing huge and spiralling losses when energy prices began to rise in the aftermath of Covid.
Things culminated in the company collapsing into administration last November. That in turn forced the Government to stage an intervention so its 1.7 million customers could keep their lights on.
Since then, the Exchequer has been required to continually throw cash at the company Wood navigated on to the rocks. And the amounts have been truly frightening.
The overall cost, according to figures buried in last week’s Autumn statement, is now forecast to reach an astonishing £6.5billion, making it the most expensive taxpayer bailout since the fall of RBS during the 2008 financial crisis.
Shamefully, given the millions they extracted, Wood and Gudka’s stewardship of the firm has instead cost the Exchequer billions (Hayden Wood is pictured at a hearing in November 2021)
It’s quite an extraordinary sum, equivalent to £230 for every household in Britain.
Yet in a grotesque twist, Wood has continued to extract cash while the taxpayer has been bailing it out.
During the first five months after the firm entered administration, he stayed on as its chief executive, continuing to draw a £250,000 salary. This scandalous fact was first revealed in April, when he appeared before the Business Committee of the House of Commons.
He was asked: ‘How much wealth have you created or taken out of the business?’ While Wood immediately (and somewhat sheepishly) confessed that he was still being paid the £250,000-a-year wage he did not disclose any other profits, insisting to MPs that he’d put ‘all my personal savings into the company’ when it was set up, had never received a single dividend or bonus and that his shareholding had been ‘wiped out’ by its collapse.
In other words, he sought to suggest that he, too, was a victim of Bulb’s demise.
Why he failed to mention the £4.5 million he’d taken from Bulb by the share sale is anyone’s guess. That transaction only came to light when its existence was reported by a Sunday newspaper a few days later, prompting Wood to write to the Committee’s chairman to correct the record.
It’s little wonder, given this questionable display, that he and Gudka have since been dubbed hipster versions — albeit more small-time — of Fred ‘the Shred’ Goodwin, the shamed banker who pocketed millions while driving RBS to rack and ruin.
Indeed, just like that tawdry affair, the saga of Bulb Energy is a tale of greed and arrogance, in which the grasping protagonists managed to privatise their financial gains from a high-profile company while leaving the public on the hook for its eventual losses.
It all began in 2015 when Wood and Gudka, who’d met at a music festival, decided to give up corporate jobs to start a firm that aspired to shake up the domestic energy market by offering cheap renewable gas and electricity, with one tariff and no exit fees.
Wood, a privately educated LSE graduate, had previously worked at Bain & Company, a U.S. management consultancy, where he’d done a project for a large energy supplier.
Gudka, a Cambridge maths graduate, ran a record label and club night called Man Make Music in his free time, and spent weekdays at Barclays, as an energy trader.
These roles appear to have convinced them that Britain’s Big Six energy firms were not only ripping off customers but providing poor service.
They raised £1.6 million by liquidating savings and going to friends, family and former colleagues to launch Bulb as a so-called ‘challenger’.
Bulb’s big idea was as follows: by using clever in-house technology and relying on word-of-mouth referrals from existing punters (rather than pricey advertising) to attract new customers, they could undercut supposedly inefficient larger rivals.
They raised £1.6 million by liquidating savings and going to friends, family and former colleagues to launch Bulb as a so-called ‘challenger’ (file image)
In a canny piece of branding, the firm would also sell only renewable energy and carbon-neutral gas, a stance that would carve out a woke niche in the market.
In holier-than-though interviews and PR statements, Wood and Gudka spoke of a ‘mission to reduce people’s bills and cut emissions’, suggesting that their principal aim was to save the planet rather than become filthy rich.
On paper, it was an enticing pitch and, after a slow start, Bulb’s low prices began to attract significant sign-ups via comparison websites. Along with snowballing numbers of referrals, for which they paid a £50 bonus to ‘members’ (as the firm chose to describe paying customers), Bulb saw its client base begin to rise exponentially.
At the start of 2017, there were just 15,000 homes on their books. By the end of that year the number had hit 300,000 and, in 2019, it went to more than a million. During the same period, the number of staff it employed rose from 55 to 575.
The — apparent! — success allowed Bulb to move to swanky new glass-walled offices next to London’s Liverpool Street Station, decked out in the manner of a Silicon Valley HQ, with neon lights on the walls, 1970s-style fluffy balls on the ceilings and tens of thousands of pounds worth of pot plants to highlight their green credentials.
Employees, known as Bulberinos, were generously paid, given free snacks and monthly allowances for social events and took part in a team-building exercise that saw them stand in two groups who each chanted one half of the company’s slogan, ‘Lower bills, lower CO2,’ getting progressively louder until they were shouting.
In 2018, Bulb was named Britain’s fastest-growing private company. Wood in particular embraced the newfound fame, headlining conventions and appearing in countless business podcasts where he styled himself as a planet-saving 21st-century tech guru.
That January, he appeared in a BBC video wearing a grey sweater, to a backdrop of guitar music to disclose his ‘CEO secret’. At a summit the following year, he encouraged delegates to ‘think about the “planet fit” instead of the “market fit” for your product’.
One particularly fawning newspaper interview described the five things readers ‘need to know’ about Bulb, including that it ‘meets the highest standards of verified social and environmental performance, public transparency and legal accountability’.
It doubtless looked splendid on paper and, in 2019, Wood and Gudka were nominated for a gong at the Ethnicity Awards, joining the Duchess of Sussex on a shortlist of people allegedly making the world a better place.
By October 2020, the firm had six per cent of the UK energy market and was planning to expand into France, Spain and the U.S.
Meanwhile, their wealth was being estimated by the Telegraph at £100 million each. The following year, Wood’s salary increased from £150,000 to £246,000.
Wood even decided to dabble in politics, appearing at events alongside then business secretary, Kwasi Kwarteng, and hosting Boris Johnson at Bulb’s London HQ.
One of a handful of executives asked to join the Government’s Council for Sustainable Business, Wood found himself advising the Department for Environment, Food and Rural Affairs (Defra) on making companies greener.
Elsewhere, as a founder member of a trade body called the ‘tech zero taskforce,’ he last year wrote an open letter calling for Rishi Sunak to scrap VAT on eco products, saying: ‘We already penalise people with taxes on cigarettes. Why not try to incentivise people to do the right things?’
But by this time, serious holes had begun to appear in Wood’s impeccably curated persona.
One source of pushback was his own workforce. In 2019, the Telegraph reported that former employees had complained of a ‘toxic’ work culture at its supposedly happy-clappy HQ, claiming they were forced to work 12-hour days in a highly stressful environment where Wood had a habit of swearing at underperforming staff and threatening to fire them.
Then came allegations of greenwashing. Last May, a report from the consultancy firm Baringa revealed that for all its eco-friendly marketing, Bulb was actually sourcing just four per cent of its energy from renewables. It was nonetheless able to legally market its tariffs as entirely green by purchasing cheap ‘Renewable Energy Guarantee of Origin’ certificates, which carbon-friendly suppliers are allowed to sell separately from the actual energy they supply.
Bulb also began facing tricky questions from Ofgem, the industry’s regulator. In August 2020, the company had to pay out £1.76million after a series of errors, including an incident where 11,400 customers were overcharged a total of £699,000. By far the biggest problem facing the business was, however, financial.
Wood even decided to dabble in politics, appearing at events alongside then business secretary, Kwasi Kwarteng, and hosting Boris Johnson (pictured) at Bulb’s London HQ
Although offering very low prices was a great way to attract new customers, it turned out to be an absolutely dreadful way to make a profit. The firm lost £28 million in 2018, £129 million in 2019 and £63 million the following year.
Wood hit serious problems in 2021, when rising prices combined with a Government price cap forced firms to begin selling energy at a loss. While most larger firms had hedged their exposure to the vagaries of the energy markets by purchasing supplies eight months in advance, Bulb was only hedged six months ahead.
At one point, it found itself selling gas at 70p per ‘therm’ when the wholesale market price had hit £4.
Its collapse was swift and inevitable. Of course, it has now left taxpayers on the hook for the £6.5 billion cost of continuing to supply its customers.
That in turn places Wood at the centre of a political storm, with calls for him to return his profits from Bulb, including the £4.5 million he obtained via the 2018 share sale, likely to grow louder with the Mail’s discovery of his extravagant home purchase.
Angela Eagle, a Labour member of the Business committee, tells me: ‘This demonstrates that they thought these organisations were cash cows and they could get huge houses out of it and then leave all the liabilities on the public purse for the rest of us to pay. I think that’s outrageous.’
Alex Stafford, a Conservative member, says of Wood: ‘It’s disgusting that, during a cost-of-living crisis, he is flaunting his ill-gotten gains and rubbing his wealth in people’s faces.
‘It’s disgraceful that he hasn’t paid any money back and to use it in this way is an insult to the British taxpayer. People like him, with their get-rich-quick schemes, ruin it for everyone else.’
Wood, for his part, has expressed contrition. ‘I’m very sorry for the way things turned out,’ he tells me.
‘I’m disappointed in the outcome and did everything I could to avoid it and protect consumers and taxpayers. This has been an extremely challenging time for the energy industry, with 29 suppliers failing since the beginning of the crisis.
‘While I was still at Bulb, I worked extremely hard with my team to minimise costs to the taxpayer, protect jobs and continue serving our customers.’
As for the future, Wood has landed on his feet via a presumably highly-paid new job at Giant Ventures, a venture capital firm that boasts Ed Miliband’s brother David and Lord Browne, former head of BP, on its advisory board.
Among Giant’s investments is a start-up firm called Field Energy, which is investing in ‘renewable infrastructure we need to reach net zero’. By happy coincidence, it turns out to have been founded by Wood’s old partner Amit Gudka. It reported losses of £2.65 million in the 15 months to March.
But as the old saying goes — and Hayden Wood’s hipster mansion shows — nothing succeeds quite like failure.
Additional reporting: LUKE BARR
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