Britain’s Octopus Energy To Spin Off AI Arm Kraken At $8.65 Billion Valuation

The move follows Kraken’s first standalone $1 billion equity raise, led by D1 Capital Partners and joined by Fidelity International, Durable Capital Partners, and the Ontario Teachers’ Pension Plan Board.

The deal positions Kraken for full independence, with its own governance, leadership, and capital structure, while Octopus Energy retains a 13.7% minority stake post-demerger.

In parallel, Octopus Energy investors are injecting an additional $320 million into the company to support innovation and expansion across retail, generation and clean technology, nearly doubling the group’s balance sheet strength.

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Kraken has become a leading technology platform in the global utilities sector, serving as a neutral, AI-driven operating system. Originally incubated within Octopus Energy it now supports over 70 million customer accounts worldwide through licensing agreements with major utilities.

Private investors are increasingly targeting energy software companies as utilities boost spending on digitization to meet decarbonization goals, improve grid reliability, and navigate regulatory complexity. Kraken’s valuation ranks it among the most highly valued energy focused software firms worldwide.

For Octopus Energy Group the spin-out sharpens strategic focus. The company continues expanding its consumer energy business manages around $10 billion in generation assets and grows adjacent offerings such as EV leasing heat pumps and solar. With operations in 27 countries and 11 million customers, Octopus is positioning itself as a vertically integrated clean energy provider rather than a broad technology conglomerate.

Post spin-out, Kraken will operate as a fully independent company, serving organizations across the global energy value chain. Management aims to accelerate platform adoption, modernize utility operations, and positively impact one billion people over the next decade.

The transaction highlights how software, data and AI are increasingly central to the economics and competitiveness of the global energy system.