$1 billion funding round values Kraken at $8.65 billion, positioning the AI platform for a potential public listing by mid 2026.
Kraken’s software now serves more than 70 million utility accounts globally, with contracted revenues exceeding $500 million annually.
The demerger sharpens strategic focus, separating consumer-facing clean energy expansion from utility digitisation critical to grid flexibility and decarbonisation.
Octopus Energy Group has confirmed plans to spin out its A -powered utility technology business, Kraken, alongside a $1 billion standalone funding round that values the platform at $8.65 billion. The transaction sets Kraken on a path toward independence and a potential public listing, while reshaping the structure of one of the UK’s most influential clean energy groups.
Kraken was incubated inside Octopus Energy and has grown into a global operating system for utilities, offering software that manages customer accounts, grid operations, field services, and new energy products. The spinout, targeted for completion by mid-2026, will see Octopus retain a 13.7% stake, while Australia’s Origin Energy, a major shareholder, will hold 22.7%.
Scaling AI Infrastructure for the Energy Transition
Kraken’s platform is designed to address one of the most pressing challenges facing power systems: integrating distributed energy assets while maintaining reliability and affordability. Its technology supports utilities in coordinating electric vehicles, rooftop solar, home batteries, and heat pumps through a Virtual Power Plant model.
In July, Kraken reported that its VPP had surpassed 500,000 connected devices, representing more than 2 gigawatts of flexible capacity. By flattening peak demand and shifting consumption to periods of lower cost and lower carbon intensity, the system aims to reduce emissions while cutting system costs.
Financial growth has followed operational scale. Kraken disclosed that contracted annual revenues have increased more than fourfold over the past three years to exceed $500 million. Through licensing agreements with major utilities, the platform is now contracted to serve more than 70 million customer accounts worldwide, including clients such as EDF and E.ON.
Independence and Strategic Focus
Kraken CEO Amir Orad framed the demerger as a catalyst for global expansion. “Becoming an independent company gives Kraken the focus and freedom to scale as a neutral, global operating system for utilities, with Octopus Energy remaining a key innovation partner and forward-thinking global customer,” he said.
For Octopus Energy, the separation allows sharper focus on its core businesses, including consumer supply, renewable generation, and clean technology development. Founder Greg Jackson emphasised the strategic logic behind the move. “Kraken is in a class of its own, in terms of technology, capability, and scale. As an independent company with world-class backers and outstanding leadership, it will be free to grow even faster and is set to be a true UK-founded success story. Having incubated Kraken, Octopus is a powerhouse of innovation and technology, and will now have even more horsepower to deliver the transformation of energy globally,” Jackson said.
Backed by Global Capital
The $1 billion investment round was led by D1 Capital Partners, with participation from Fidelity International, Durable Capital Partners, and Ontario Teachers’ Pension Plan Board through its late-stage growth arm, Teachers’ Venture Growth. Origin Energy will also invest $140 million as part of the transaction.
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D1 founder and chief investment officer Dan Sundheim highlighted Kraken’s commercial traction. “We believe Kraken is adding significant value to utilities, as reflected in its customer satisfaction, stickiness, and growth. The strength of its leadership team gives us confidence in its ability to continue executing on the large opportunity to modernise utility operations. We are excited to partner as Kraken begins a new chapter as an independent company,” he said.
Origin Energy CEO Frank Calabria pointed to accelerating customer adoption as a validation of the strategy. “In signing this major new customer, Kraken is rapidly closing in on its 100 million customer account target well ahead of plan,” he said. Calabria added, “We believe these transactions put Octopus and Kraken in a strong position to unlock their next phase of growth, underpinned by the appropriate capital structure.”
What Executives and Investors Should Watch
For utilities, Kraken’s rise reflects a broader shift toward software-led grid management as electrification accelerates. For investors, the spinout highlights growing appetite for infrastructure-adjacent climate technology with recurring revenues and long-term contracts. At a policy level, platforms that enable demand flexibility and decentralised energy integration are increasingly aligned with net zero pathways in the UK, Europe, and beyond.
As Kraken steps out as an independent company, its trajectory will be closely watched as a test case for how AI-driven platforms can reshape the economics and governance of global power systems.
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