LONDON | Dec 29 — Britain’s Octopus Energy said on Monday it will spin off its technology arm, Kraken, as a standalone company valued at $8.65 billion, following a funding round led by U.S. investment firm D1 Capital Partners.
The transaction will see new and existing investors acquire about $1 billion in equity in Kraken, while investors led by Octopus Capital will inject an additional $320 million into Octopus Energy, the company said.
Kraken provides AI-powered energy software to major utilities around the world, including EDF, National Grid U.S., and Tokyo Gas, and is contracted to manage more than 70 million customer accounts globally.
The investment paves the way for Kraken’s formal demerger from Octopus Energy, which will retain a 13.7% stake in the newly independent business.
Investors in the funding round include Ontario Teachers’ Pension Plan, Fidelity International, and Durable Capital Partners, Octopus Energy said.
The Financial Times reported that the spin-off could lead to a Kraken initial public offering within two years, potentially followed by a future listing of the privately held Octopus Energy. Reuters could not independently verify the report, and both companies declined to comment on potential listing plans.
Kraken reported contracted annual revenue exceeding $500 million as of September, reflecting strong demand from utilities seeking to modernize energy billing and operations through automation and artificial intelligence.
In a separate announcement, Australia’s Origin Energy said it would invest about $140 million in Kraken as part of the fundraising and maintain a 22.7% stake following completion of the transaction. Origin also agreed to waive exclusivity for Kraken’s services in Australia in exchange for an additional 1.5% equity stake.
