In a landmark move for the UK's energy technology sector, Octopus Energy Group has completed the spin-off of its proprietary technology arm, Kraken. The demerger follows a significant $1bn investment round led by global financial heavyweights, valuing the AI-powered platform at a staggering $8.65bn (£6.4bn).
A Major Investment Fuels Independence
The pivotal funding round was spearheaded by the international investment firm D1 Capital Partners. They were joined by a consortium of new backers, including Fidelity International, Durable Capital Partners, and the Ontario Teachers’ Pension Plan Board. In a related transaction, investors led by Octopus Capital injected a further $320m (£237m) directly into Octopus Energy to propel innovation and expansion within the core group.
Following the transaction, Octopus Energy will retain a 13.7 per cent stake in the newly independent Kraken. The substantial cash generated from the deal will be shared, with the majority earmarked to bolster Octopus Energy's own operations, while Kraken gains the capital to pursue its ambitious growth strategy autonomously.
Kraken: A Global Platform Unshackled
Kraken is an advanced software platform that uses artificial intelligence to manage energy accounts for utilities. It is already contracted to serve more than 70 million household and business accounts worldwide through licensing agreements with major players like EDF, E.ON Next, and Tokyo Gas, securing $500m in committed annual revenue.
The demerger is designed to unlock Kraken's full potential by allowing it to operate as a fully independent and neutral technology provider for utilities across the globe. Octopus Energy stated this separation will speed up international adoption of the platform and allow the wider Octopus group to concentrate on scaling its consumer-facing energy supply, generation, and clean tech ventures.
Leadership Eyes Accelerated Global Impact
Greg Jackson, founder of Octopus Energy Group, hailed the move. He described Kraken as being "in a class of its own" in terms of its technology, capability, and scale. "As an independent company with world-class backers and outstanding leadership, it will be free to grow even faster and is set to be a true UK-founded success story," Jackson said.
Echoing this sentiment, Kraken's Chief Executive, Amir Orad, emphasised the strategic benefits of independence. "Becoming an independent company gives Kraken the focus and freedom to scale as a neutral, global operating system for utilities, with Octopus Energy remaining a key innovation partner," Orad stated. He welcomed the new investors, stating their backing would help accelerate the platform's impact on the energy transition and modernise energy systems worldwide, with an ambitious goal to positively impact a billion lives within a decade.
