Octopus Energy, Britain’s largest gas and electricity supplier, is set to spin off its AI-powered technology division, Kraken Technologies, as a standalone company valued at $8.65 billion (£6.4 billion). The move follows the sale of a $1 billion stake in Kraken to a consortium of investors led by New York-based D1 Capital Partners, paving the way for Kraken’s potential stock market flotation in the medium term.

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Kraken Technologies: A Global Energy Platform

Kraken Technologies was originally developed for Octopus Energy’s internal use but has since expanded to provide AI-driven billing and customer service solutions for other energy companies. Its platform manages energy consumption, incentivizes customers to reduce usage during peak periods, and currently serves 70 million household and business accounts worldwide, including clients such as EDF, E.On Next, TalkTalk, and National Grid US.

Octopus founder and CEO Greg Jackson said that Kraken will operate completely independently of Octopus within a few months, giving it the flexibility to work with multiple energy providers and accelerate its global expansion.

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Investment and Ownership Structure

The $1 billion investment will be split between Kraken and Octopus, with the majority going to Octopus to fund further growth and expansion. Octopus will retain a 13.7% stake in Kraken. Other investors include Fidelity International and a unit of the Ontario Teachers’ Pension Plan.

Kraken CEO Amir Orad emphasized that the spinoff will provide the company with the focus and freedom needed to scale its operations independently, noting that previously it had faced challenges doing business with Octopus’s competitors.

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Potential IPO and Stock Listing

Octopus Energy has indicated there is “every chance” Kraken will list its shares in the medium term, with potential locations for the flotation being London or the US. Jackson highlighted that the decision will depend on where the company can secure the most investor support and stock exchange backing.

A London listing could reverse a trend of tech firms favoring US markets, strengthening the UK’s position as a hub for energy technology investment.

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Impact on Employment and UK Economy

Octopus Energy has created 12,000 jobs in the UK, with 1,500 positions attributed to Kraken. The spinoff will allow Kraken to expand its global operations while maintaining its UK headquarters.

The cash raised from the stake sale is expected to almost double Octopus Energy Group’s already strong balance sheet, supporting continued growth as the company now serves 7.7 million households, overtaking British Gas as the UK’s largest energy supplier.

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Regulatory Context and Growth Prospects

Despite its rapid growth, Octopus remains one of three retail energy companies in the UK that has not yet met Ofgem’s financial resilience targets. The Kraken spinoff and investment injection are expected to strengthen the group’s financial position ahead of the company’s upcoming annual results.

Jackson emphasized the broader vision: Kraken’s AI-driven platform positions it to meet rising global energy demands, help households manage consumption efficiently, and support the transition to a greener, more sustainable energy system.