UPDATE: Octopus Energy has just announced a significant move, selling a minority stake in its Kraken Technologies division, valuing the software unit at an impressive £6.4 billion ($8.65 billion). This strategic decision opens the door for a potential stock market flotation, marking a pivotal moment for the UK energy giant.
In a groundbreaking investment round, Octopus has sold approximately £740 million ($1 billion) of equity to a consortium that includes prominent investors such as D1 Capital Partners, Fidelity International, and a unit of the Ontario Teachers’ Pension Plan. The cash influx will primarily support Octopus Energy, while also benefiting Kraken Technologies.
Additionally, another £237 million ($320 million) is being injected into Octopus by investors, led by Octopus Capital, aimed at fueling “innovation and growth.” Following this deal, Octopus Energy will maintain a 13.7% stake in Kraken Technologies.
Founder Greg Jackson praised Kraken, stating, “Kraken is in a class of its own, in terms of technology, capability, and scale.” He emphasized that this independence will allow Kraken to grow more rapidly, positioning it as a UK-born success story. “Octopus is a powerhouse of innovation and technology,” he added, highlighting the renewed potential for global energy transformation.
Kraken, an artificial intelligence-driven platform, serves over 70 million household and business energy accounts worldwide. The spinoff is expected to accelerate Kraken’s global expansion, with reports suggesting a potential public listing in London or New York by September 2024.
Chief Executive Amir Orad stated, “Becoming an independent company gives Kraken the focus and freedom to scale as a neutral, global operating system for utilities.” He noted that this fresh capital will enable Kraken to deepen partnerships with utilities globally, aiming to positively impact a billion lives within a decade.
This demerger comes at a time when Octopus Energy has surged to become the UK’s largest energy supplier, serving 7.7 million households and overtaking British Gas earlier this year. However, it was reported that Octopus is among three retail energy firms that have yet to meet the financial resilience targets set by regulator Ofgem.
With this significant investment round, Octopus Energy Group’s balance sheet is set to nearly double, preparing the company for future ventures and innovations in the rapidly evolving energy sector.
The announcement of this stake sale is a critical development for both Octopus Energy and Kraken Technologies, signaling strong investor confidence and paving the way for ambitious growth strategies in the coming years. As the energy landscape continues to shift, all eyes will be on Kraken’s next steps and its anticipated stock market debut.
