Octopus Energy is reportedly eyeing a potential £10bn demerger of its technology platform Kraken.
Sky News reported over the weekend that Britain’s biggest gas and electricity supplier is plotting to separate the fast-growing Kraken away from the group.
The plan, according to Sky’s sources, would be to give Octopus’s existing investors – which include former US Vice President Al Gore’s Generation Investment Management, the Canada Pension Plan Investment Board, Galvanize Climate Solutions and Lightrock – shares in the business.
A minority 20% stake would be sold to external investors to validate the technology platform’s valuation, according to insiders, which could be north of £10bn.
The Octopus Energy group was valued at £7.2bn in an investment round last year. It has invested in a string of energy technology companies including Exagen, Vyntelligence, Deep Green and recently Sheffield-based MOPO.
Investment banks Citi, Goldman Sachs, JP Morgan and Morgan Stanley have been invited to pitch for the demerger mandate, according to Sky.
Octopus Energy – which acquired collapsed Bulb out of special administration in 2022 – has 7.5m retail customers in Britain, with a 24% market share, and 2.5m overseas.
Kraken superhub to make Manchester ‘Silicon Valley of Energy’
Operating system Kraken connects customer billing; management of energy devices such as heat pumps and home/EV batteries; and smart grids. It is licensed to EON and EDF Energy, plus water company Severn Trent and broadband provider Cuckoo, in the UK.
It also has customers in Australia, Japan, France and the US, among other countries. It is contracted to more than 70m customer accounts.
A separation from Octopus Energy would allay fears from potential customers of a conflict of interest, according to Sky’s report.