Standalone funding round values Kraken at $8.65 billion
British renewable energy group Octopus Energy is preparing to spin out its artificial intelligence software arm, Kraken Technologies, a move that could ultimately lead to a public listing. The plan follows Kraken’s first standalone funding round, which raised $1 billion and valued the business at $8.65 billion.
Origin Energy, a major shareholder in Octopus, confirmed that the transaction is designed to pave the way for a formal separation by mid-2026. Origin will invest $140 million as part of the process, while Octopus Energy is expected to retain a 13.7% stake in the spun-off company. Origin’s holding in Kraken will remain at 22.7%.
Investor backing accelerates growth ambitions
The funding round included participation from Daniel Sundheim’s hedge fund D1 Capital Partners, along with a large unnamed Kraken customer. According to Origin Energy CEO Frank Calabria, the addition of this major client brings Kraken closer to its goal of managing 100 million customer accounts, well ahead of schedule.
Calabria said the transaction positions both Octopus and Kraken to enter their next phase of growth with a capital structure better suited to their distinct business models. Kraken’s contracted annual recurring revenue has more than doubled over the past 18 months, reflecting strong demand from utility providers.
Kraken’s role as a core utility software platform
Kraken provides energy management software used by major utilities including EDF and E.ON. The platform supports billing, customer service and grid optimization, helping energy suppliers modernize operations as electricity systems become more complex.
Kraken CEO Amir Orad has described the business as the “modern operating system for utilities,” noting that its close ties to Octopus Energy helped accelerate adoption across the sector. As more energy companies licensed the technology, Kraken increasingly took on the characteristics of a pure software provider.
Path toward a potential market listing
Orad has previously indicated that a future IPO is a significant opportunity but emphasized the need for Kraken to operate independently as a software-focused company before pursuing public markets. The planned separation is expected to attract a broader pool of late-stage software investors over time.
With strong revenue growth, a deepening client base and increased independence from Octopus Energy, Kraken is positioning itself as one of the most prominent AI-driven software firms in the global energy sector.
Octopus Energy, Kraken Technologies, energy software, AI in utilities, renewable energy technology, potential IPO, utility platforms
