BREAKING: Octopus Energy has just announced a significant deal, selling a minority stake in its Kraken Technologies division, valuing the software arm at an impressive £6.4 billion ($8.65 billion). This strategic move sets the stage for a potential stock market flotation, emphasizing the urgency of this development for investors and industry watchers.
In a bold financial maneuver, Octopus Energy sold approximately £740 million ($1 billion) of equity in Kraken to a consortium of investors, including notable firms such as D1 Capital Partners, Fidelity International, and a division of the Ontario Teachers’ Pension Plan. The funds will primarily support Octopus Energy’s ongoing growth, with a significant portion also directed towards Kraken.
UPDATE: Alongside this sale, an additional £237 million ($320 million) will be invested in Octopus by its major investor, Octopus Capital, aimed at driving “innovation and growth” within the company. This investment is critical as Octopus Energy gears up to reveal its annual results later today.
Octopus Energy will maintain a 13.7% stake in Kraken Technologies post-transaction, underscoring the company’s ongoing commitment to its software arm. Greg Jackson, founder of Octopus Energy Group, stated, “Kraken is in a class of its own, in terms of technology, capability, and scale.” He emphasized that this independence will empower Kraken to accelerate its growth trajectory.
The Kraken platform, powered by artificial intelligence (AI), is currently utilized by over 70 million household and business energy accounts globally. This demerger is anticipated to facilitate Kraken’s expansion on a global scale, with possibilities of a public listing in either London or New York by next September.
Amir Orad, CEO of Kraken, expressed enthusiasm about this new chapter, stating, “Becoming an independent company gives Kraken the focus and freedom to scale as a neutral, global operating system for utilities.” Orad highlighted the importance of the new investors in accelerating their impact on the energy transition.
This move comes as Octopus Energy continues its rapid growth, recently surpassing British Gas to become the UK’s largest energy supplier, now serving 7.7 million households. Despite this success, the company has faced challenges, having not yet met the financial resilience targets set by regulator Ofgem.
The investment round and cash inflow will nearly double Octopus Energy Group’s already robust balance sheet, positioning it strongly for future ventures. As the energy sector evolves, all eyes will be on Octopus Energy and Kraken Technologies, making this a pivotal moment in the industry.
Stay tuned for updates on this developing story as Octopus Energy prepares to unveil more details about its annual performance and future plans.
