In a landmark deal that reshapes the UK's energy technology landscape, Octopus Energy has agreed to sell a significant minority stake in its proprietary software division, Kraken Technologies. The transaction values the artificial intelligence-powered platform at a staggering £6.4 billion ($8.65 billion), setting the stage for its eventual separation and a potential blockbuster stock market listing.
The Deal and Its Key Investors
The agreement, announced on Tuesday 30 December 2025, will see a consortium of heavyweight global investors acquire approximately $1 billion (£740 million) worth of equity in Kraken. The investor group includes the global investment firm D1 Capital Partners, Fidelity International, and a unit of the Ontario Teachers’ Pension Plan.
While the capital raised will support both Octopus and Kraken, the majority of the proceeds are earmarked for the parent company, Octopus Energy Group. In a parallel move, an additional $320 million (£237 million) will be injected directly into Octopus Energy. This secondary funding round is led by Octopus Capital, a major existing investor, and is intended to fuel further "innovation and growth" within the core energy supply business.
Paving the Way for Independence and IPO
This strategic investment is the critical next step following plans unveiled in September to spin off Kraken Technologies. Post-transaction, Octopus Energy will retain a 13.7% stake in the software business, which will operate as an independent company.
The demerger is widely seen as a precursor to a stock market flotation, with speculation that an Initial Public Offering (IPO) could occur as soon as September next year. Potential listing venues are reported to be either London or New York.
Kraken's platform, initially developed for Octopus's own use, has evolved into a major player in the global utilities software market. It now serves over 70 million household and business energy accounts worldwide for clients including EDF, E.On Next, TalkTalk, and National Grid US.
Leadership Vision and Market Context
Greg Jackson, founder of Octopus Energy Group, hailed Kraken as being "in a class of its own." He stated that as an independent entity with "world-class backers," Kraken would be free to accelerate its growth, positioning it as a flagship UK tech success story. He added that Octopus, having incubated the technology, would now have "even more horsepower" to drive the global energy transition.
Echoing this sentiment, Kraken's Chief Executive, Amir Orad, emphasised the benefits of independence. "Becoming an independent company gives Kraken the focus and freedom to scale as a neutral, global operating system for utilities," he said. Orad set an ambitious goal for the newly autonomous company: to positively impact a billion lives within a decade by modernising energy systems worldwide.
The deal arrives amid a period of remarkable growth for Octopus Energy, which earlier this year overtook British Gas to become the UK's largest domestic energy supplier, serving 7.7 million households. The company stated that the investment round would "almost double Octopus Energy Group’s already strong balance sheet," bolstering its financial position. This is notable as the firm confirmed earlier this year it was one of three suppliers yet to meet Ofgem's financial resilience targets.
