Octopus Energy is preparing to spin off its technology unit, Kraken, which has been valued at £6.4 billion amid a competitive landscape for a stock market listing. The company’s chief executive, Greg Jackson, indicated that the choice for Kraken’s initial public offering (IPO) would likely be between London and the United States, creating a potential transatlantic rivalry.
Investment Insights and Market Implications
The announcement follows a significant transaction in which Octopus sold a £740 million minority stake in Kraken to a group of investors that includes D1 Capital Partners, Fidelity, and a unit of the Ontario Teachers’ Pension Plan. This deal not only bolsters Kraken’s valuation but also positions it favorably for a potential listing on the FTSE 100 index, should it opt for London.
Kraken provides artificial intelligence technology that assists energy companies in managing customer billing, smart meters, and electric vehicle charging. With over 70 million energy accounts connected through clients like EDF and TalkTalk, Kraken has established itself as a significant player in the energy technology sector.
Jackson expressed a preference for a London listing during an interview on BBC Radio 4’s Today programme. He stated, “For large tech companies such as Kraken, it’s going to be between London and the US. I really hope it’s London.” His comments underscore the need for stock exchanges to demonstrate their attractiveness to global investors.
Market Context and Future Prospects
A successful listing of Kraken would represent a substantial boost for the London stock market, which has recently shown signs of revival after years of limited initial public offerings. In 2025, London achieved its best year for IPOs since 2021, raising £1.9 billion through 11 listings, according to a report by PwC. The final quarter alone accounted for £1.3 billion, with companies such as fintech bank Shawbrook among those that went public.
Despite this positive momentum, analysts caution that London may face challenges in retaining Kraken. Dan Coatsworth, head of markets at AJ Bell, remarked that the investors who recently acquired a stake in Kraken are aware of the valuation differences between UK and US markets. He noted, “The City may have a tough job convincing the board not to opt for the US.”
Octopus Energy’s potential IPO comes at a time when the company recently reported a £260.1 million annual loss for the year ending on April 30, attributed to an “exceptionally warm spring” that diminished demand for gas and electricity.
As interest in IPOs continues to grow, there are expectations that other notable companies, including RAC, Waterstones, and Revolut, could also consider floating in London in the upcoming year. According to Vhernie Manickavasagar of PwC UK, “Looking ahead, momentum is set to continue into 2026, with a robust pipeline of IPOs expected.”
The stakes are high for Kraken and its parent company as they navigate this competitive atmosphere. The outcome of their decision will not only shape their future but also have broader implications for the UK’s standing as a hub for technology-driven enterprises seeking public investment.
