Kraken raises £1bn to sell AI-powered utility OS licences and modernise grids
This article covers Kraken, a technology startup spun out from Octopus Energy Group as an independent entity and recapitalised with around £1bn of investor equity. The move aims to accelerate Kraken’s global licensing of utility software and to support utilities in modernising grid and retail energy operations during the energy transition.
Octopus Energy Group is spinning out its in-house technology business Kraken as an independent company at a reported valuation of $8.65bn, in a move the group says will accelerate the platform’s global licensing of utility software. The separation formalises Kraken’s demerger from Octopus and signals fresh momentum for utility software in the energy transition.
Why it matters
The creation of a standalone Kraken matters because it separates a fast-growing, software-focused business from a vertically integrated energy supplier and investor. That separation could make Kraken easier to sell to, partner with, and licence to incumbent utilities and new market entrants worldwide. It also highlights the increasing role of data and software in modernising grid and retail energy operations as utilities digitise.
Inside the product
Kraken is presented as an AI-powered operating system for utilities that Octopus says is contracted to serve more than 70 million accounts under licence. The platform reportedly processes in excess of 15 billion new data points per day and has seen contracted annual revenue exceed $500 million, a fourfold increase in three years.
Following the demerger Kraken will operate with a separate cap table, independent governance, and its own leadership team. The split is intended to let Kraken focus on licensing and platform partnerships while Octopus concentrates on retail customers, generation and clean technology businesses.
Who are the investors?
The first standalone investment round into Kraken is reported to be led by D1 Capital Partners and joined by new investors including Fidelity International, Durable Capital Partners and the Ontario Teachers’ Pension Plan Board via its Teachers’ Venture Growth vehicle. Existing Octopus Energy Group backers are said to continue supporting both Octopus and Kraken.
In the transaction new and existing investors are acquiring around $1bn of Kraken equity to fund both companies, while investors led by Octopus Capital are also injecting a further $320m into Octopus for innovation and growth. Octopus Energy Group will retain a 13.7% stake in Kraken after the split. The deal is presented as significantly strengthening Octopus Energy Group’s balance sheet.
In the announcement, Dan Sundheim, Founder and CIO of D1 Capital Partners, said:
We believe Kraken is adding significant value to utilities, as reflected in its customer satisfaction, stickiness, and growth. The strength of its leadership team gives us confidence in its ability to continue executing on the large opportunity to modernise utility operations. We are excited to partner as Kraken begins a new chapter as an independent company.
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Founder perspective
In the announcement, Greg Jackson, Founder of Octopus Energy Group, said:
Kraken is in a class of its own, in terms of technology, capability, and scale. As an independent company with world-class backers and outstanding leadership, it will be free to grow even faster and is set to be a true UK-founded success story.
Having incubated Kraken, Octopus is a powerhouse of innovation and technology, and will now have even more horsepower to deliver the transformation of energy globally. With over 10 thousand staff, 11 million customers, $10bn of generation under management, and businesses from EV leasing to heat pump design and manufacture, Octopus is set for even greater things over the coming years.
With a 4.8/5 Trustpilot rating in 7 countries, Octopus has proven that energy can be transformed – and it will now be free to compete even more vigorously against incumbents.
In the announcement, Amir Orad, CEO of Kraken, said:
Becoming an independent company gives Kraken the focus and freedom to scale as a neutral, global operating system for utilities, with Octopus Energy remaining a key innovation partner and forward-thinking global customer.
I'm excited to welcome our new investors, led by D1. With their backing, we can accelerate our impact on the energy transition, deepen partnerships with utilities worldwide, and help modernise the energy system at global scale – our goal being to positively impact a billion lives within a decade.
The bigger picture
The demerger fits a wider pattern of corporate spinouts and specialisation in energy technology, where software platforms built inside consumer-facing groups are separated to reach broader markets. For utilities, the appetite for third-party operating systems and advanced billing and customer-management platforms is accelerating as they confront decarbonisation targets, distributed energy resources and new retail models.
Kraken’s reported commercial traction and the size of the financing round point to continued investor interest in utility software and operational technology. For the UK, the move is another example of a homegrown company attempting to export technology to global energy markets while remaining UK-founded in origin.
The transaction will be watched across the UK and Europe as a test case for how founder-led energy tech businesses scale via demerger and external capital, and how software-first approaches are integrated into traditionally utility-dominated value chains.
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