Octopus sells Kraken stake in $8.65B spin-off deal
UK utility Octopus Energy Group Ltd. has agreed to sell a stake in its software unit, Kraken Technologies, valuing the business at $8.65 billion, marking the first step toward spinning it off.
In its initial funding round, Octopus sold around $1 billion of Kraken equity to a mix of new and existing investors, according to a company statement, News.Az reports, citing Bloomberg.
The transaction highlights the increasing demand among power utilities for advanced software that can manage intermittent renewable energy and integrate customer assets such as electric vehicles and heat pumps into the grid.
Kraken’s platform currently serves over 70 million accounts globally through licensing agreements with major utilities and has been a key driver of Octopus’s rapid growth into the UK’s largest electricity supplier.
Following the deal, Octopus will retain a 13.7% stake in Kraken. The funding round is led by D1 Capital Partners, with participation from new investors including Fidelity International, Durable Capital Partners, and an arm of the Ontario Teachers’ Pension Plan Board.
Octopus said the demerger will allow Kraken to operate as a fully independent technology platform with its own governance and leadership. It will also enable Octopus to concentrate on expanding its consumer, generation, and clean technology operations.
Origin Energy Ltd., a significant investor in Octopus, stated that the funding round will facilitate Kraken’s official separation from Octopus by mid-next year. After the spin-off, Origin will directly hold a 22.7% interest in both Kraken and Octopus.
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