Energy giant Octopus to split off Kraken technology arm

UK energy giant Octopus has said it is spinning off its software arm Kraken Technologies.

It said the demerger will help to speed up the expansion of Kraken globally, with the firm’s AI-powered platform already connected to more than 70 million household and business accounts.

It comes amid reports Kraken could go public with a stock market listing, likely to be in London or New York, in the next 12 months.

The business could be valued at as much as 15 billion US dollars (£11 billion), according to reports by the Wall Street Journal.

Kraken was initially built for use by Octopus but has since picked up a raft of other utilities clients, including EDF, E.ON Next, TalkTalk and National Grid US.Bosses said Kraken has 500 million US dollars of committed annual revenues through these licensing deals, quadrupling contracted revenues over the past three years.

Amir Orad, chief executive of Kraken, said: “Kraken is now a globally successful business in its own right, operating independently for some time – completing our journey to full independence is a strategic and inevitable next step.

“It gives us more freedom to invest, expand, and serve our utility clients equally.

“We’ll keep pushing innovation in the cloud, advancing our utility-grade AI and harnessing vast amounts of energy and grid data, while ensuring structural clarity for customers, investors, and partners.”

The move comes amid the continued growth of Octopus Energy, which became the UK’s largest energy supplier earlier this year, serving 7.7 million households.

Greg Jackson, founder of Octopus, said: “We set out to create Kraken as a global platform to transform utilities and deliver the innovation, service and value that customers deserve.

“I am so proud that the business is smashing it – and is now such a huge and successful company in its own right.

“Under Amir’s leadership and with a remarkably talented team, Kraken is soaring to new heights.

“I set the embarrassingly low goal of 100,000,000 accounts by 2027. It looks like it’ll beat that and can now aim to serve a billion people over the next decade.”