Kraken Energy: AI Utility Platform Spins Out from Octopus Energy with €7.3B Valuation

Octopus Energy Group has successfully secured €850 million ($1 billion) for its technology subsidiary, Kraken. This significant investment marks the first independent funding round for Kraken, valuing the company at an impressive €7.3 billion ($8.65 billion) and officially separating it from Octopus Energy.

Leading the funding round is D1 Capital Partners, along with contributions from Fidelity International, Durable Capital Partners, and Ontario Teachers’ Pension Plan Board through its growth arm, Teachers’ Venture Growth. Additionally, existing investors of Octopus Energy also participated in the round.

Founder of Octopus Energy Group, Greg Jackson, expressed his confidence in Kraken’s potential, stating, “Kraken stands out for its advanced technology, capabilities, and scale. With newfound independence and support from top-tier investors and leadership, Kraken is poised for accelerated growth, positioning itself as a standout success story originating from the UK.”

Jackson also emphasized Octopus Energy’s commitment to innovation and technology, highlighting the company’s substantial resources and diverse business ventures, ranging from electric vehicle leasing to heat pump design and manufacturing. He foresees continued success for Octopus Energy in the years to come.

As outlined in the press release, a group of investors led by Octopus Capital will inject an additional €271.7 million ($320 million) into Octopus to fuel further innovation and expansion. Following the demerger, Octopus Energy will retain a 13.7% stake in Kraken post-spinout.

Kraken serves as an AI-powered operating system tailored for utilities, boasting support for over 70 million accounts worldwide through licensing agreements with major utility providers.

The demerger has paved the way for Kraken to operate independently as a cutting-edge technology platform for global utilities. With a separate cap table, governance structure, and leadership team, Kraken now functions as a distinct entity.

CEO of Kraken, Amir Orad, expressed his enthusiasm for the company’s newfound independence, stating, “Establishing Kraken as an independent entity allows us to focus and expand as a neutral, global operating system for utilities, while maintaining Octopus Energy as a key partner and forward-thinking customer.”

Orad welcomed the support of new investors led by D1, anticipating accelerated progress in driving the energy transition, strengthening partnerships with utilities worldwide, and facilitating global-scale modernization of the energy sector, with the ultimate goal of positively impacting a billion lives within the next decade.

In a separate announcement, Kraken disclosed that its contracted annual revenues surpassed €424.5 million ($500 million) by 2025.

Headquartered in London and New York, with regional hubs in Paris, Tokyo, and Melbourne, Kraken collaborates with prominent utilities such as EDF Energy, E.ON Next, Octopus Energy, Origin, Plenitude, Portsmouth Water, National Grid, and Tokyo Gas.

Octopus Energy operates as a global clean energy and technology enterprise across 27 countries, encompassing the entire energy value chain. The company manages an extensive €8 billion (£7 billion) renewables portfolio, in addition to ventures in electric vehicle leasing, heat pump technology, and solar energy solutions.