Octopus Energy Group’s technology company, Kraken, is set for an IPO after announcing a $1bn investment.
The round sees new and existing investors acquiring c.$1bn of Kraken equity to fund both Octopus and Kraken.
It represents the first standalone investment into Kraken and was led by D1 Capital Partners at a valuation of $8.65bn.
The demerger will enable Kraken to operate as a fully independent technology platform for utilities worldwide and allows Octopus Energy Group to focus on scaling its consumer, generation, and clean technology businesses.
IPO in New York or London
It also paves the way for a potential stock market flotation in the next two to three years in either London or New York.
Greg Jackson, founder of Octopus Energy Group, said: “Kraken is in a class of its own, in terms of technology, capability, and scale.
Greg Jackson, founder of Octopus Energy Group
“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 10,000 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.”
Amir Orad, CEO of Kraken, said: “Becoming an independent company gives Kraken the focus and freedom to scale as a neutral, global operating system for utilities, with Octopus Energy remaining a key innovation partner and forward-thinking global customer.
“I’m excited to welcome our new investors, led by D1. With their backing, we can accelerate our impact on the energy transition, deepen partnerships with utilities worldwide, and help modernise the energy system at global scale – our goal being to positively impact a billion lives within a decade.”
Writing later on LinkedIn, Orad added: “Becoming a fully independent company gives us the focus and autonomy to scale.
“Octopus Energy, the original force behind our early success, is now transitioning to become a minority investor while remaining a key innovation forward-thinking customer.
“Why does this all matter? Because the world needs more energy, cleaner energy, and more affordable energy. Legacy infrastructure is under strain. Software, data, and AI like ours are now essential to making the energy system resilient, flexible, and fair.”
The funding round is led by D1 Capital Partners, a leading global investment firm, alongside other new investors such as Fidelity International, Durable Capital Partners and Ontario Teachers’ Pension Plan Board, via its late stage growth business Teachers’ Venture Growth.
Octopus Energy Group’s 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.
Double balance sheet
Collectively, these almost double Octopus Energy Group’s balance sheet.
After the split, Octopus will retain a 13.7 per cent stake in Kraken.
Over the past decade, Kraken has grown into the world’s most advanced, proven data-driven operating system for utilities, processing over 15 billion new data points a day.
Kraken announced in September that its contracted annual revenue exceeded $500m – growing 4x in just three years.
Dan Sundheim, founder and CIO of D1 Capital Partners, said: “We believe Kraken is adding significant value to utilities, as reflected in its customer satisfaction, stickiness, and growth.
“The strength of its leadership team gives us confidence in its ability to continue executing on the large opportunity to modernise utility operations.
“We are excited to partner as Kraken begins a new chapter as an independent company.”
Headquartered in London and New York, Kraken has regional centres in Paris, Tokyo and Melbourne.
Octopus Energy is a global clean energy and technology business, driving the affordable, green energy system of the future.
Under its own retail brand, Octopus delivers world-class customer service and cutting-edge energy products to 11 million households globally.
It operates a £7bn renewables portfolio as well as thriving EV leasing, heat pump, and solar businesses.