British renewable energy company Octopus Energy has announced plans to spin out its AI-driven technology unit, Kraken Technologies.
The move sets the stage for Kraken to potentially pursue a public listing.
Origin Energy, which holds a significant stake in Octopus, confirmed on Monday that the startup had raised $1 billion in its first standalone funding round, valuing Kraken at $8.65 billion.
This injection of capital paves the way for the spin-off, with Octopus aiming to complete the separation by mid-2026.
A “major Kraken customer” and Daniel Sundheim’s D1 Capital Partners participated in the funding round, according to Origin Energy.
Additionally, Origin will invest $140 million in the process.
“In signing this major new customer, Kraken is rapidly closing in on its 100 million customer account target well ahead of plan,” said Origin CEO Frank Calabria.
Post spin-off, Octopus Energy will retain a 13.7% stake in Kraken, while Origin’s interest will remain at 22.7%.
Calabria added that the transactions “put Octopus and Kraken in a strong position to unlock their next phase of growth, underpinned by the appropriate capital structure.”
Kraken provides energy software to utilities, including EDF and E.ON, and has more than doubled its contracted annual recurring revenue over the past 18 months.
Kraken CEO Amir Orad highlighted earlier this year that the company benefits from a robust investor base focused on energy and utilities.
He also described Kraken as “the modern operating system for utilities,” noting that its technology adoption has accelerated as more energy companies license its platform.
Orad indicated in September that while a public listing is an attractive prospect, Kraken must first solidify its position as a pure software company.
“With that, we expect, over time, to get more pure software long-term, late-stage investors. Today, we have a very strong investor base that focuses on energy and on utilities. Over the years… we expect that to evolve to be more software focused, given the [separation],” he said.
