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Octopus Energy brand electric vehicles parked outside a modern suburban house on March 19, 2025 in Folkestone, United Kingdom. The house is equipped with solar panels on the roof, highlighting its commitment to renewable energy. The scene represents the growing adoption of sustainable energy solutions, with Octopus Energy playing a key role in promoting electric mobility and solar energy integration. (photo by Andrew Aitchison / In images via Getty Images)
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British renewable energy startup Octopus Energy is set to spin off its AI technology unit Kraken Technologies, paving the way for a possible public listing.
Origin Energy, which owns a major stake in Octopus, said in a statement statement As of Monday evening, Octopus had raised $1 billion in its first standalone funding round, valuing the company at $8.65 billion. The funding round paves the way for the spin-off, with Octopus aiming for a separation by mid-2026, Origin said.
The statement said “a major client of Kraken,” which it did not name, and Daniel Sundheim’s hedge fund D1 Capital Partners were involved in the investment round. Origin will also invest $140 million in the process.
“By signing this major new customer, Kraken is rapidly approaching its goal of 100 million customer accounts, well ahead of schedule,” said Frank Calabria, CEO of Origin.
Octopus Energy will retain a 13.7% stake in Kraken following the spin-off, while Origin’s stake in Kraken remains at 22.7%.
“We believe these transactions place Octopus and Kraken in a strong position to unlock their next phase of growth, supported by an appropriate capital structure,” Calabria added.
Kraken provides energy software to utility companies including EDF and E.ON. Its contracted annual recurring revenue has more than doubled over the past 18 months, according to Origin Energy.
Earlier this year, Kraken CEO Amir Orad told CNBC’s “Squawk Box Europe” that the company has a “very strong investor base” that focuses on energy and utilities.
Kraken has benefited from being owned by Octopus as a growing number of energy companies have licensed its technology, transforming the company into what Orad described as “the modern operating system for utilities.”
Asked about a public listing in September, Orad told CNBC that “the opportunity is significant” but that Kraken needed to focus on being a pure software company.
“With this, we expect, over time, to attract more long-term, late-stage pure-play software investors. Today, we have a very strong investor base that is focused on energy and utilities. Over the years…we expect this to evolve to be more software-focused, given the evolving landscape. [separation],’” he said.
— CNBC’s Domi Suskova contributed to this report.
