UPDATE: Octopus Energy has just announced a major deal, selling a minority stake in its Kraken Technologies division, valuing the software unit at an impressive £6.4 billion ($8.65 billion). This move not only positions Kraken for a potential stock market flotation but also significantly boosts Octopus Energy’s financial footing.
The UK energy giant, now the country’s largest gas and electricity supplier, has sold roughly £740 million ($1 billion) in equity to a consortium of investors, including notable firms like D1 Capital Partners, Fidelity International, and a unit of the Ontario Teachers’ Pension Plan. This substantial investment will primarily support Octopus Energy, with the remaining funds directed toward Kraken’s growth initiatives.
In a further boost, an additional £237 million ($320 million) will be injected into Octopus by its investors, led by Octopus Capital, to enhance “innovation and growth.” Following this transaction, Octopus will retain a 13.7% stake in Kraken Technologies.
Greg Jackson, founder of Octopus Energy Group, expressed optimism about Kraken’s future, stating, “Kraken is in a class of its own, in terms of technology, capability, and scale.” He emphasized that as an independent entity backed by top investors, Kraken is poised to accelerate its growth and become a leading success story in the UK tech landscape.
Kraken is a state-of-the-art, artificial intelligence (AI) powered platform that serves over 70 million household and business energy accounts globally. The demerger aims to expedite Kraken’s international expansion, with a potential public listing anticipated by September 2024 in either London or New York.
Amir Orad, CEO of Kraken, highlighted the significance of this shift, stating, “Becoming an independent company gives Kraken the focus and freedom to scale as a neutral, global operating system for utilities.” He added that with new backing, Kraken can deepen partnerships worldwide, modernizing the energy system and aiming to positively impact a billion lives within the next decade.
This strategic move comes as Octopus Energy continues to experience rapid growth, having overtaken British Gas to become the UK’s largest energy supplier, now serving 7.7 million households. However, it should be noted that Octopus is among three retail energy firms that have yet to meet the financial resilience targets set forth by UK regulator Ofgem.
The investment round is set to nearly double Octopus Energy Group’s robust balance sheet, solidifying its position in the competitive energy market. As Octopus prepares to unveil its annual results later today, industry experts and investors alike are closely watching these developments, which could reshape the future of energy management and technology.
Stay tuned for more updates as this story unfolds, and the implications of this deal are fully realized.
