Octopus Energy Group is preparing to spin off its Kraken technology arm in a landmark deal that values the company at $8.65 billion following a standalone $1 billion investment round.
The financing, announced in London on December 29, is led by D1 Capital Partners, with participation from major global investors including Fidelity International, Durable Capital Partners and the Ontario Teachers’ Pension Plan Board through its Teachers’ Venture Growth arm.
The move paves the way for Kraken’s formal spinoff and independence from Octopus Energy Group, allowing the platform to operate as a neutral, global technology provider to utilities as Octopus sharpens its focus on energy retail, generation and clean technology.
As part of the transaction, new and existing investors will acquire approximately $1 billion in Kraken equity. In parallel, investors led by Octopus Capital are investing an additional $320 million in Octopus Energy Group to support innovation and growth across its businesses. Following the split, Octopus will retain a 13.7% stake in Kraken.
Originally developed within Octopus, Kraken has grown into one of the world’s most advanced AI-powered operating systems for utilities. Through licensing agreements with major energy providers, the company is now tasked with servicing more than 70 million customer accounts worldwide and processes over 15 billion new data points daily.
In September, Kraken announced that contracted annual revenue had exceeded $500 million, representing four-fold growth in just three years. The company’s technology is increasingly viewed as critical infrastructure for utilities modernizing billing, customer service and grid management to support the energy transition.
Greg Jackson, founder of Octopus Energy Group, said the demerger was a natural next step. “Kraken is in a class of its own in terms of technology, capability and scale,” he said. “As an independent business with world-class backers, it can grow even faster and is well on its way to becoming a real UK-based success story.”
Jackson added that Octopus itself would benefit from the move, citing its more than 10,000 employees, 11 million customers, $10 billion in generation assets under management and expansion into areas such as electric vehicle leasing and heat pump manufacturing.
Kraken CEO Amir Orad said independence would allow the platform to accelerate global adoption. “Becoming an independent company gives Kraken the focus and freedom to scale as a neutral, global utility operating system,” he said. “Our goal is to positively impact one billion lives within a decade.”
Dan Sundheim, founder and chief investment officer of D1 Capital Partners, said Kraken’s growth and customer loyalty underpinned the company’s investment decision. “We believe Kraken delivers significant value to utilities, reflected in customer satisfaction, retention and growth,” he said.
Following the spin-off, Kraken will operate with its own governance structure, leadership team and cap table. This is one of the most significant UK tech spin-outs in recent years and highlights the growing global demand for data-driven energy infrastructure.
