Octopus Energy to spin off Kraken technology arm at $8.65bn valuation

Octopus Energy has agreed to sell a stake of around $1bn in its Kraken technology arm to a syndicate of investors led by global investment firm D1 Capital Partners.

New investors include Fidelity International, Durable Capital Partners and Ontario Teachers’ Pension Plan Board, via its late stage growth business Teachers’ Venture Growth.

Octopus Energy announced in September that it was planning to spin off Kraken. This is the first standalone investment round into the technology arm and values the business at $8.65bn.

The company said in a statement on Monday that its existing investors continue to back the group, "supporting both Octopus and Kraken as they enter their next phase of growth".

Investors led by Octopus Capital are also injecting a further $320m into Octopus for innovation and growth. Collectively, these almost double Octopus Energy Group’s "already strong" balance sheet. After the split, Octopus will retain a 13.7% stake in Kraken.

Launched within Octopus Energy Group, Kraken’s AI‑powered operating system is now contracted to serve more than 70 million accounts worldwide through licensing agreements with major utilities.

Founder Greg Jackson said: "Kraken is in a class of its own, in terms of technology, capability, and scale. As an independent company with world-class backers and outstanding leadership, it will be free to grow even faster and is set to be a true UK-founded success story.

"Having incubated Kraken, Octopus is a powerhouse of innovation and technology, and will now have even more horsepower to deliver the transformation of energy globally. With over 10 thousand staff, 11 million customers, $10bn of generation under management, and businesses from EV leasing to heat pump design and manufacture, Octopus is set for even greater things over the coming years.

"With a 4.8/5 Trustpilot rating in 7 countries, Octopus has proven that energy can be transformed – and it will now be free to compete even more vigorously against incumbents."