Kraken Technologies to Spin Out as Standalone Business Following $1bn Stake Sale
Kraken Technologies is set to be spun out as a standalone business after a $1bn stake sale that values the company at $8.65bn (£6.4bn). Investors led by D1 Capital Partners are acquiring the stake, with Octopus Energy retaining a 13.7% share. Most of the funding from the sale will support Octopus's expansion efforts.
Kraken will begin to operate independently within a few months, and a stock market flotation is a potential future step, with possible listings in London or the US. The company, which serves about 70 million accounts, uses artificial intelligence to automate customer service and billing, alongside rewarding lower energy use during peak times. Its clients include EDF, E.On Next, TalkTalk, and National Grid US.
Other investors in the $1bn funding round include Fidelity International and a unit of the Ontario Teachers’ Pension Plan. Octopus Energy, the UK's largest energy supplier by customer numbers with about 7.7 million households, is currently under scrutiny by Ofgem regarding financial resilience targets.
Despite a 10% increase in sales to £13.7bn for the year ending April, Octopus Energy Group reported a £260m pre-tax loss, impacted by warmer weather and the conclusion of energy crisis payments amounting to around £103m. Octopus has confirmed its UK headquarters will remain, having created approximately 12,000 UK jobs, including 1,500 linked to Kraken. If investor support aligns, London is preferred as the listing venue for Kraken.
