Octopus Energy, the UK’s largest gas and electricity supplier, is preparing to spin off its AI-driven technology division, Kraken Technologies, as a standalone company. The move follows a $1bn investment in Kraken led by New York-based D1 Capital Partners, valuing the platform at $8.65bn (£6.4bn).
Kraken, which uses artificial intelligence to streamline billing and customer service for energy companies, also helps manage energy usage by rewarding customers for reducing consumption during peak times. Originally developed for Octopus, Kraken now serves major utilities including EDF, E.On Next, TalkTalk, and National Grid US, covering 70 million accounts worldwide.
Octopus will receive the majority of the $1bn funding to support its growth, while Kraken will get the remainder. The spin-off is expected to make Kraken fully independent within months, allowing it to expand more freely and work with competitors. Octopus will retain a 13.7% stake.
Founder Greg Jackson confirmed there is a strong possibility of a stock market listing for Kraken in the medium term, with London or the US as potential locations. Kraken CEO Amir Orad emphasized that independence will give the company more flexibility to grow globally.
The spin-off comes as Octopus continues to expand, now serving 7.7 million UK households. The group posted a £260m pre-tax loss for the year ending April, down from a £78m profit a year earlier, citing warm weather and the end of energy crisis payments. Sales still rose 10% to £13.7bn, with Kraken contributing 1,500 of the 12,000 UK jobs created by Octopus.
