Octopus Energy is set to separate its AI-driven platform, Kraken Technologies, into a standalone company after a deal valuing the division at $8.65 billion (£6.4 billion). The energy group, Britain’s largest gas and electricity supplier, sold a $1 billion stake in Kraken to investors led by New York-based D1 Capital Partners.
The transaction paves the way for Kraken’s demerger from Octopus, with the possibility of a stock market listing in the medium term. Greg Jackson, Octopus founder and chief executive, told the BBC that the flotation could take place in either London or the United States. He said the decision would depend on where the business could secure the most investor support.
Kraken uses artificial intelligence to automate customer service and billing for energy providers. The platform also optimises energy usage for customers, rewarding them for reducing consumption during peak periods. Initially developed for Octopus, Kraken has since expanded to work with other utility companies, including EDF, E.On Next, TalkTalk, and National Grid US, serving roughly 70 million households and businesses worldwide.
Most of the $1 billion investment will fund Octopus Energy’s wider growth, with the remainder allocated to Kraken. Jackson said Kraken would operate independently from Octopus within months. Other investors include Fidelity International and a unit of the Ontario Teachers’ Pension Plan, while Octopus will retain a 13.7 percent stake in the company.
Kraken chief executive Amir Orad described the spinoff as a chance for the company to gain “focus and freedom” to expand, noting that its growth had previously been constrained by its ties to Octopus. Jackson added that Kraken’s global investor base gives it flexibility in choosing a listing location, but emphasised that keeping the headquarters in the UK remains a priority.
The demerger comes as Octopus Energy continues to grow, overtaking British Gas earlier this year to become the UK’s largest energy supplier, serving 7.7 million households. Jackson said Octopus has created 12,000 jobs in the UK, including 1,500 through Kraken.
Octopus also published its financial results for the year to April, reporting a £260 million loss before tax, compared with a £78 million pre-tax profit a year earlier. Total sales rose by 10 percent to £13.7 billion, but the company cited lower energy demand caused by unusually warm weather and the end of energy crisis allowance payments in 2024. Jackson said the UK’s hottest spring on record since 1885 reduced gas usage by 11 percent in March and 25 percent in April, costing the business around £103 million.
Despite the loss, the investment in Kraken is expected to “almost double Octopus Energy Group’s already strong balance sheet,” according to the company. The move highlights Octopus’s strategy to strengthen its AI-driven operations while maintaining its position at the forefront of the UK energy market.
