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

Octopus Energy Executes Major Spinoff of AI Technology Unit

British renewable energy company Octopus Energy is advancing plans to spin off Kraken Technologies, its AI-native utility software division, as an independent entity following a $1 billion funding round that values the business at $8.65 billion 1

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. The transaction, led by New York-based hedge fund D1 Capital Partners, marks a strategic shift that positions the energy management software platform for accelerated global expansion and a potential public listing 2

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The spinoff is targeted for completion by mid-2026, with Octopus Energy retaining a 13.7% stake in Kraken Technologies while Origin Energy will maintain a 22.7% ownership interest after investing $140 million in the funding round 1

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. Additional backing came from Fidelity International, Ontario Teachers' Pension Plan, and an unnamed major Kraken customer 2

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. Through its investment arm Octopus Capital, the parent company is investing an additional $320 million to secure its retained stake 3

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AI-Powered Platform Serving 70 Million Accounts Globally

Kraken Technologies has emerged as a specialized operating system for utilities that leverages Artificial Intelligence (AI) to automate customer service, billing, and energy consumption management. The platform rewards customers for reducing usage during peak times and enables rapid deployment of new products and services 3

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. Currently serving more than 70 million household and business accounts across 27 countries, Kraken has been licensed by over 40 utility providers including energy giants EDF, E.ON, National Grid US, and Tokyo Gas 2

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The company disclosed annual recurring revenue exceeding $500 million in September, with Origin Energy reporting that contracted annual recurring revenue more than doubled over the past 18 months 1

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. Origin Energy CEO Frank Calabria noted that Kraken is "rapidly closing in on its 100 million customer account target well ahead of plan" following the signing of a major new customer 1

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Stock Market Flotation Under Consideration for London or US

Octopus Energy founder and CEO Greg Jackson told the BBC there is "every chance" Kraken will pursue a stock market flotation "in the medium term," with the location being decided "between London and the US" 2

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. A London listing would reverse the trend of British firms choosing US markets for their initial public offerings, potentially providing a boost to the UK's capital markets 2

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Jackson emphasized that the decision will depend on where Kraken can secure "the most investor support and the most support from the stock exchange," while expressing his preference for a London listing if conditions prove favorable 2

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. The company has created 12,000 jobs in the UK, with 1,500 attributed to Kraken Technologies, and will maintain its headquarters in Britain regardless of listing location 2

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Strategic Independence Enables Broader Market Access

Kraken CEO Amir Orad stated that the spinoff will provide the "focus and freedom" necessary for growth, addressing previous challenges in securing business with Octopus Energy's competitors 2

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. Operating as an independent entity will allow Kraken to pursue partnerships across global utility markets without conflicts of interest. Orad committed to "keep pushing innovation in the cloud, advancing our utility-grade AI and harnessing vast amounts of energy and grid data" 3

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The separation reflects how utilities face mounting pressure to modernize systems, manage volatile energy markets, and handle increasing customer complexity 4

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. For Octopus Energy, which overtook British Gas as the UK's largest energy supplier earlier this year with 7.7 million households, the transaction allows sharper focus on retail energy and renewables while unlocking value from its technology platform 2

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. The majority of the $1 billion investment will fund Octopus's expansion, with the remainder supporting Kraken's independent operations 2

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As part of the arrangement, Origin Energy agreed to drop its exclusivity arrangement in Australia for an additional 1.5% equity interest, opening Kraken's software to more energy providers in the country 3

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. Greg Jackson set an ambitious target of serving one billion people over the next decade, stating his original goal of 100 million accounts by 2027 "looks like it'll beat that" 3

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. The transaction positions AI-powered platforms as critical infrastructure amid the global energy transition, with utilities increasingly recognizing software capable of managing complexity as essential to their operations 4

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