Octopus Energy Spins Out Kraken Technologies in Deal Valuing Platform at 8650 Million Dollars

Octopus Energy has completed a strategic demerger of its artificial intelligence-powered software platform, Kraken Technologies, through the sale of a $1 billion minority stake to institutional investors. The transaction values the technology business at $8.65 billion and represents a significant milestone in the energy sector’s digital transformation.

The equity sale attracted a consortium of heavyweight investors, including D1 Capital Partners, Fidelity International and a subsidiary of Ontario Teachers’ Pension Plan. Britain’s largest gas and electricity supplier will deploy the capital to accelerate both Octopus and Kraken’s operational capabilities, with an additional £320 million investment round led by Octopus Capital to support innovation initiatives and market expansion.

The demerger positions Kraken Technologies for potential public market listing on either the London Stock Exchange or New York Stock Exchange by September 2026. Octopus Energy will retain a 13.7 per cent stake in the spun-off entity following completion of the separation, maintaining strategic alignment whilst allowing Kraken operational independence to pursue aggressive growth strategies.

Kraken Technologies has established itself as a dominant force in energy retail software infrastructure, connecting more than 70 million household and business energy accounts globally. The platform’s client roster includes major utilities operators such as EDF, E.ON Next, TalkTalk and National Grid US, demonstrating its scalability across diverse market structures and regulatory frameworks.

Greg Jackson, founder of Octopus Energy, characterised the platform as possessing unparalleled technological capabilities within its competitive segment. He emphasised that independence would enable Kraken to accelerate its expansion trajectory whilst allowing Octopus Energy to concentrate resources on transforming global energy delivery systems. The founder’s comments suggest confidence in the strategic rationale for separation, highlighting differentiated growth opportunities for both entities.

Octopus Energy’s market position has strengthened considerably, having surpassed British Gas to become Britain’s largest energy supplier during 2025, serving 7.7 million households. The company initially developed Kraken for internal operations before recognising commercial potential and licensing the technology to external utilities companies, creating a software-as-a-service revenue stream that complemented its traditional energy supply business.

Management indicated the combined investment rounds would nearly double Octopus Energy Group’s balance sheet strength, providing financial flexibility to pursue organic growth initiatives and potential acquisitions. The capital injection arrives as energy retailers face mounting infrastructure investment requirements to support grid modernisation and renewable energy integration across developed markets.

The transaction structure reflects growing investor appetite for energy technology platforms that combine artificial intelligence capabilities with proven operational track records at scale. Kraken’s valuation multiple suggests investors perceive substantial value in software solutions that address fundamental inefficiencies within energy retail operations, particularly around customer management, billing accuracy and grid optimisation.

Octopus Energy announced preliminary spinoff intentions for Kraken Technologies in September, signalling strategic intent to unlock value through business unit separation. The company plans to release annual financial results on Tuesday, which will provide additional insight into operational performance across both the energy supply and technology segments ahead of the formal demerger completion.