Octopus Energy spins off AI unit Kraken Technologies at $8.65 billion, eyeing public listing

UK's Octopus Energy to spinoff AI unit Kraken at $8.65 billion valuation

British renewable energy startup Octopus Energy is set to spin out its AI tech unit Kraken Technologies, setting the stage for a potential public listing. Origin Energy, which holds a major stake in Octopus, said in a statement late on Monday that Octopus had raised $1 billion in its first standalone funding round, valuing the business at $8.65 billion. The funding round paves the way for the spinoff, with Octopus targeting a separation by mid-2026, Origin said. The statement said "a major Kraken customer," which it did not name, and Daniel Sundheim's hedge fund D1 Capital Partners were involved in the investment round. Origin will also invest $140 million as part of the process. "In signing this major new customer, Kraken is rapidly closing in on its 100 million customer account target well ahead of plan," said Origin CEO Frank Calabria. Octopus Energy will retain a 13.7% stake in Kraken following the spin-out, while Origin's interest in Kraken remains at 22.7%. "We believe these transactions put Octopus and Kraken in a strong position to unlock their next phase of growth, underpinned by the appropriate capital structure," Calabria added. Kraken supplies energy software to utility companies, including EDF and E.ON. Its contracted annual recurring revenue more than doubled in the last 18 months, according to Origin Energy. Earlier this year, Kraken CEO Amir Orad told CNBC's "Squawk Box Europe" that the company has a "very strong investor base" that focuses on energy and utilities.

Octopus Energy to spin off $8.65bn tech arm Kraken

Octopus Energy is set to spin off its Kraken Technologies arm as a standalone company after a deal to sell a stake in the platform valued it at $8.65bn (£6.4bn). The energy giant, Britain's biggest gas and electricity supplier, has sold a $1bn stake in the AI-based division to a group of investors led by New York-based D1 Capital Partners. The move paves the way for Kraken to be demerged from Octopus, and for a potential stock market flotation for the business in the future. Octopus founder and chief executive Greg Jackson told the BBC there was "every chance" Kraken would list its shares "in the medium term", with the location of the flotation "between London and the US". Kraken uses AI to automate customer service and billing for energy companies and can manage when customers use energy, rewarding them for reducing consumption at peak times. It was initially built for use by Octopus but has since picked up a raft of other utilities clients, including EDF, E.On Next, TalkTalk and National Grid US. It now serves 70 million household and business accounts around the world. The majority of the $1bn investment will go to Octopus to fund its expansion, with Kraken receiving the rest. Mr Jackson said Kraken will be operating completely independently of Octopus "within a few months". Other investors in the business included Fidelity International and a unit of Ontario Teachers' Pension Plan, with Octopus maintaining a 13.7% stake in Kraken. Kraken chief executive Amir Orad said the spinoff would give it the "focus and freedom" to grow, with the company having previously struggled to do business with Octopus's rivals. Mr Jackson said that for a large tech firm such as Kraken, the location for its share listing would be either London or the US. "One thing about Kraken is we've got this global investor base... and so really the stock exchanges have got to kind of show why they are the right one for business." A London listing for Kraken's shares would reverse a trend of firms snubbing the UK in favour of floating in the US. Mr Jackson said Octopus had created 12,000 jobs in the UK, with 1,500 of these attributed to Kraken. He said the company would keep its headquarters in the UK, and that "if London can be the right place to list, I would love that". "But it's down to be where you're going to get the most investor support and the most support from the stock exchange." The demerger comes amid the continued growth of Octopus Energy, which overtook British Gas to become the UK's largest energy supplier earlier this year, serving 7.7 million households. But it confirmed this year it was one of three retail energy firms that had not yet met regulator Ofgem's financial resilience targets. Octopus, which will unveil its annual results on Tuesday, said the cash injection would "almost double Octopus Energy Group's already strong balance sheet".

Octopus Energy spins out AI-native utility software subsidiary Kraken - SiliconANGLE

Octopus Energy spins out AI-native utility software subsidiary Kraken British clean energy giant Octopus Energy Group Ltd. has announced it's spinning off its most valuable technology asset as a standalone entity. The company said its Kraken Technologies Ltd. subsidiary will become an independent company valued at $8.65 billion after it closed on a $1 billion funding round led by D1 Capital Partners. Octopus said it's investing an additional $320 million into Kraken through its investment arm Octopus Capital, which will enable it to retain a 13.7% ownership stake in the software entity once its separation is finalized. Kraken is the developer of a specialized operating system for utilities providers that uses artificial intelligence agents to automate the delivery of services such as electricity, gas, water and telecommunications. Its platform also enhances customer service and facilitates the rapid delivery of new products and services relating to those utilities, and has been licensed by more than 40 utility providers across 27 countries, serving more than 70 million customer accounts. . Kraken's clients include energy giants such as Électricité de France SA, National Grid USA Service Company Inc. and Tokyo Gas Co. Ltd. In September, it disclosed annual recurring revenue of more than $500 million. Octopus founder Greg Jackson said in a statement that his company set out to create Kraken as a platform that would transform the utilities industry, and said the company is now "smashing it" globally. "I set the embarrassingly low goal of 100,000,000 accounts by 2027," he said. "It looks like it'll beat that and can now aim to serve a billion people over the next decade." As a standalone entity, Kraken will be led by its current Chief Executive Officer Amir Orad, who said spinning out will give the company more freedom to invest and expand its business. "We'll keep pushing innovation in the cloud, advancing our utility-grade AI and harnessing vast amounts of energy and grid data, while ensuring structural clarity for customers, investors, and partners," he promised. Kraken's $1 billion funding round also received backing from the Ontario Teachers' Pension Plan, Fidelity International and Durable Capital Partners. The round suggests there is growing confidence in utilities software's potential to become a high-growth sector amid a global transition to cleaner energy sources, the company said. Another major backer of Kraken is the Australian energy giant Origin Energy Ltd., which has invested $140 million into the raise and obtained a 22.7% stake in the startup. As part of the arrangement, Origin agreed to drop its exclusivity arrangement for an extra 1.5% equity interest, which means Kraken's software will be available to more energy providers in the country.

Octopus Energy to spin out AI unit Kraken Technologies for $8.65B By Invezz

Invezz.com - British renewable energy group Octopus Energy is moving closer to spinning out its artificial intelligence-driven software arm, Kraken Technologies, in a step that underlines how digital infrastructure is becoming central to the UK energy transition. The proposed separation follows a major funding round that repositions Kraken as a standalone technology business rather than a support function within an energy supplier. As utilities face growing pressure to modernise systems, manage volatile energy markets, and handle rising customer complexity, Kraken's evolution reflects a broader shift where AI-powered platforms are reshaping how energy companies operate and scale. Funding sets directionThe latest move follows a $1 billion first standalone funding round for Octopus, disclosed late Monday by The transaction values the Octopus business at $8.65 billion and is designed to pave the way for Kraken's separation by mid-2026. Origin said the funding structure supports the spin-off process, allowing both businesses to pursue their own growth strategies with clearer capital allocation. The round included participation from Daniel Sundheim's hedge fund D1 Capital Partners, alongside an unnamed major Kraken customer. Origin will also invest $140 million as part of the process, reinforcing its strategic interest in the technology platform. The funding is expected to support Kraken's expansion, product development, and customer onboarding as it prepares to operate independently. Ownership after separationOnce the spin-off is completed, Octopus Energy will retain a 13.7% stake in Kraken Technologies, while Origin's ownership will stand at 22.7%. The revised ownership structure is intended to balance independence with continuity, allowing Kraken to operate as a focused technology provider while maintaining ties to its original backers. Origin said the transactions are designed to position both Octopus and Kraken for their next growth phase, supported by capital structures aligned to their respective business models. The separation also reflects how energy groups are increasingly unlocking value by structurally separating technology platforms from supply operations. For Octopus, this allows sharper focus on retail energy and renewables. For Kraken, it opens the door to broader commercial partnerships across global utility markets. Software at the coreKraken supplies energy management software to utility companies, including EDF and Its platform supports functions such as billing, customer engagement, and operational optimisation. According to Origin Energy, Kraken's contracted annual recurring revenue has more than doubled over the past 18 months, signalling accelerating demand from utilities seeking scalable digital solutions. Customer growth has been a central theme. Origin chief executive Frank Calabria said the signing of a major new customer has brought Kraken closer to its target of managing 100 million customer accounts, and that progress toward this target is ahead of plan. This scale positions Kraken among the largest dedicated energy software platforms globally. Strategic implicationsThe planned mid-2026 separation places Kraken at the intersection of AI adoption and the UK's energy transition. As grids decentralise and customer data volumes expand, software platforms capable of managing complexity are becoming critical infrastructure. By advancing the spin-off, Octopus is signalling that AI-led energy software is no longer a secondary function but a standalone growth engine with global relevance.