Octopus Energy Announces $8.65 Billion Spin-off of AI Unit, Kraken Technologies
British energy titan, Octopus Energy, has made public its decision to spin off its AI-powered technology wing, Kraken Technologies. The move comes after a successful $1 billion funding round spearheaded by U.S. investment firm, D1 Capital Partners. This has led to an independent company valuation of $8.65 billion.
The deal, sealed on December 30, 2025, signifies a pivotal moment in the fusion of AI and the global energy sector. Kraken Technologies offers AI-driven software platforms to utilities worldwide, aiding in the management of billing, customer engagement, and energy assets such as solar panels, heat pumps, and EV chargers.
Currently, the platform caters to over 70 million customer accounts globally. It reported a contracted annual revenue surpassing $500 million in September 2025.
Major energy corporations including EDF, E.ON, National Grid U.S., Origin Energy, and Tokyo Gas rely on Kraken’s technology. CEO Amir Orad has dubbed it as “the modern operating system for utilities”. The spin-off, slated for completion by mid-2026, will enable Kraken to function independently, while Octopus Energy retains a 13.7% stake in the business.
Participation in the deal includes Ontario Teachers’ Pension Plan, Fidelity International, and Durable Capital Partners. Analysts speculate that this separation could lay the groundwork for a potential initial public offering in either London or New York in the coming year or two. Some projections suggest that Kraken could reach a valuation of up to $15 billion in an IPO scenario.
In the most recent reporting period, Kraken’s profits skyrocketed 483% to £35 million. This robust growth trajectory has drawn the attention of global investors.
Source: CNBC