Octopus Energy Group is poised to sell a significant minority stake in its fast-growing software division, Kraken Technologies, in a deal that could value the unit at a staggering $10 billion (£7.4 billion).
Investor Syndicate Lines Up for Major Deal
Sky News has learned that a syndicate of heavyweight investors is being lined up to acquire between 10% and 20% of Kraken. The investor group is expected to include D1 Capital Partners, the fund management titan Fidelity, and an arm of the Ontario Teachers' Pension Plan from Canada.
The parent company, which became Britain's largest household energy supplier earlier this year, has engaged Goldman Sachs to manage the demerger and stake sale. Sources indicate an official announcement is expected imminently.
Valuation Soars as Kraken's Global Reach Expands
A valuation in the range of $9bn to $10bn for Kraken would imply the entire Octopus Energy Group, including its retail supply business, is worth around £15 billion. This marks a dramatic doubling of the group's valuation from just over a year ago.
The Kraken platform is an operating system licensed to utility companies worldwide. It manages customer billing and integrates renewable energy sources, smart grids, and devices like heat pumps and EV batteries. Its client list includes rivals E.ON and EDF in the UK, as well as Origin Energy in Australia and Tokyo Gas in Japan. Globally, it now serves over 70 million customer accounts.
Strategic Move to Fuel Further Growth
The demerger plan, first revealed in July, serves a strategic purpose. Separating Kraken from the retail supply arm is designed to remove any perceived conflict of interest for potential clients, a factor that had reportedly deterred some energy suppliers from using the platform.
The move will also significantly augment the paper fortune of Octopus Energy's founder and chief executive, Greg Jackson, underlining his success in building a global tech champion from the UK. Kraken is chaired by Gavin Patterson, the former BT Group chief executive, and is led by CEO Amir Orad.
Beyond energy, Kraken has diversified, recently joining a consortium exploring a bid for the troubled utility Thames Water. The company remains on track to hit a target of 100 million global accounts by 2027, a goal Jackson has suggested may now be seen as "embarrassingly unambitious."
