Octopus Energy Group is preparing to spin off its technology arm Kraken in a landmark deal valuing the business at $8.65 billion, following a $1 billion private equity investment round.
The funding, which was announced in London on December 29, is led by D1 Capital Partners, with participation from major global investors including Fidelity International, Durable Capital Partners and the Ontario Teachers’ Pension Plan Board through its Teachers’ Venture Growth arm.
The move paves the way for Kraken’s formal separation and independence from Octopus Energy Group, allowing the platform to operate as a neutral, global technology provider for utilities while Octopus sharpens its focus on energy sales, production and clean technology.
As part of the transaction, new and existing investors received approximately $1bn of Kraken equity. Similarly, investors led by Octopus Capital are injecting a further $320m into Octopus Energy Group to support innovation and growth across its wider businesses. After the split, Octopus will retain a 13.7% stake in Kraken.
Originally built inside Octopus, Kraken has grown into one of the world’s most advanced AI-powered systems for energy resources. It now contracts to operate more than 70 million customer accounts worldwide through licensing agreements with major energy providers and processes more than 15 billion new data points every day.
In September, Kraken revealed that its annual contract revenue exceeded $500m, representing a fourfold increase in just three years. The company’s technology is increasingly being recognized as a critical utility infrastructure that improves billing, customer service and grid management to support the energy transition.
Greg Jackson, founder of Octopus Energy Group, said the demerger marked the next natural step. “The Kraken is in a class of its own in terms of technology, power and scale,” he said. “As an independent company with world-class sponsors, it will be free to grow quickly and will be a UK-based success story.”
Jackson added that Octopus itself will benefit from this, pointing to its more than 10,000 employees, 11 million customers, $10 billion in assets under management and expansion in areas such as EV leasing and heat pump production.
Kraken’s CEO, Amir Orad, said that independence will allow the platform to accelerate global adoption. “Being a private company gives Kraken the focus and freedom to scale as a neutral, global service provider,” he said. “Our goal is to positively impact the lives of billions within ten years.”
Dan Sundheim, founder and chief investment officer of D1 Capital Partners, said Kraken’s growth and customer retention support the company’s investment decision. “We believe Kraken adds significant value to services, as seen in its customer satisfaction, retention and growth,” he said.
Following the demerger, Kraken will operate with its own management structure, leadership team and cap table, marking one of the most significant UK spin-outs in recent years and underscoring the growing global demand for data-driven energy infrastructure.
