What's happened
Octopus Energy is selling a 10-20% stake in Kraken Technologies to a consortium of investors, valuing the AI-driven energy platform at up to $10 billion. The demerger aims to accelerate Kraken’s global expansion and potential IPO, with major investors including D1 Capital, Fidelity, and Ontario Teachers' Pension Plan. The move follows Octopus’s growth as the UK’s largest energy supplier.
What's behind the headline?
The demerger of Kraken from Octopus Energy signals a strategic shift to unlock the platform’s full potential. Kraken’s valuation at up to $10 billion reflects its rapid growth and international reach, with over 70 million accounts and plans to hit 100 million by 2027. The move will likely attract more investment and facilitate a public listing, possibly in London or New York. This separation also aims to mitigate concerns about conflicts of interest, as Kraken’s technology is licensed to competitors like EDF and E.ON, and even explores diversification into water utilities. The involvement of major investors such as D1 Capital and Fidelity underscores confidence in Kraken’s technological edge and growth prospects. However, the timing suggests that Octopus’s continued expansion and recent market dominance are also key drivers, positioning Kraken as a standalone global leader in energy software. The deal will almost double Octopus’s financial strength, enabling further innovation and international expansion, while Kraken’s independence should accelerate its impact on the energy transition and smart grid development. Overall, this move is poised to reshape the energy tech landscape, with Kraken emerging as a major player in global energy infrastructure.
What the papers say
The Independent reports that Octopus Energy sold about $1 billion of equity in Kraken to a consortium including D1 Capital, Fidelity, and Ontario Teachers' Pension Plan, with plans to fund Kraken’s global expansion and innovation. Sky News highlights that the valuation could reach $10 billion, with investors participating in a deal that will see Kraken valued at between $9 billion and $10 billion. Reuters notes Kraken’s existing client base of major utilities like EDF and National Grid US, and its licensing to over 70 million accounts worldwide. The articles collectively emphasize Kraken’s rapid growth, strategic importance, and the significant investment backing it has attracted, positioning it as a key player in the future of energy technology.
How we got here
Octopus Energy, which became the UK’s largest energy supplier earlier this year, is spinning off Kraken Technologies, its AI-powered platform used by major utilities worldwide. Kraken connects over 70 million customer accounts and is licensed to several energy companies in the UK and internationally. The demerger aims to boost Kraken’s growth and address perceived conflicts of interest within Octopus’s integrated business model.
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