Overview
Octopus Energy has taken a major step in reshaping the global energy technology market by spinning out its AI-powered utility platform, Kraken, as a fully independent company. The move follows a landmark €850 million funding round that values Kraken at €7.3 billion, making it one of the most valuable energy software companies to emerge from Europe.
The transaction formally separates Kraken from Octopus Energy Group while maintaining a strategic relationship between the two businesses. Octopus Energy retains a 13.7 percent stake in Kraken, ensuring continued collaboration while allowing the platform to scale independently.
This development underlines how central technology has become to the energy transition, with software now playing as important a role as generation assets or customer supply.
What is Kraken and why it matters
Kraken is an end-to-end operating system designed specifically for energy and utility companies. It uses artificial intelligence, automation, and real-time data processing to manage every part of a utility’s operations, from billing and customer service to grid optimisation and flexibility services.
Unlike traditional utility IT systems, which are often fragmented and decades old, Kraken was built cloud-first and designed to operate at massive scale. According to the company, the platform now supports more than 70 million customer accounts globally through licensing agreements with major utilities.
Kraken’s technology is used by companies such as EDF Energy, E.ON Next, National Grid, Tokyo Gas, Origin, Plenitude, and Portsmouth Water. Octopus Energy remains one of its largest customers and continues to act as a live testing ground for new features.
Details of the €850 million funding round
The €850 million investment represents the first standalone funding round for Kraken as an independent business. It establishes a separate cap table, governance structure, and leadership team, giving the company the freedom to grow as a neutral technology provider to utilities worldwide.
Lead and participating investors
The round was led by D1 Capital Partners, with participation from several major global investors:
- Fidelity International
- Durable Capital Partners
- Ontario Teachers’ Pension Plan Board through Teachers’ Venture Growth
- Existing Octopus Energy shareholders
In parallel, investors led by Octopus Capital committed an additional €271.7 million into Octopus Energy Group to support continued innovation and international growth across its broader energy businesses.
Leadership and governance at Kraken
Kraken is led by Amir Orad, who serves as Chief Executive Officer. Under the spin-out, Kraken now operates with independent governance and a leadership team focused solely on scaling the platform globally.
Commenting on the demerger, Amir Orad said becoming an independent company gives Kraken the focus and freedom to scale as a neutral operating system for utilities, while keeping Octopus Energy as a key innovation partner and forward-looking customer. He added that the company’s ambition is to positively impact one billion lives within the next decade by modernising energy systems worldwide.
Greg Jackson, Founder of Octopus Energy Group, described Kraken as being in a class of its own in terms of capability, scale, and technology. He said the spin-out allows both Kraken and Octopus Energy to grow faster and play distinct roles in transforming the global energy system.
Kraken’s financial performance and growth
Kraken has already reached significant commercial scale. In September 2025, the company reported contracted annual revenues exceeding €424.5 million, reflecting strong demand from utilities seeking modern digital platforms.
The business operates globally, with headquarters in London and New York, and regional hubs in Paris, Tokyo, and Melbourne. This footprint_toggle approach allows Kraken to serve regulated markets with local support while maintaining a centralised technology platform.
The new funding will be used to:
- Accelerate international expansion
- Deepen partnerships with existing utility customers
- Invest further in AI-driven automation and grid intelligence
- Support product development for flexibility, electrification, and decarbonisation use cases
What the spin-out means for Octopus Energy
For Octopus Energy, the Kraken demerger unlocks significant strategic value. While the group is best known as the UK’s largest household energy supplier, serving around 7.7 million domestic customers, technology has long been at the core of its competitive advantage.
Octopus Energy continues to operate across the entire energy value chain, including:
- Retail supply of 100 percent renewable electricity
- Smart tariffs such as Agile Octopus and Octopus Tracker
- Octopus Energy Generation, managing around £7 billion in renewable assets
- Electric vehicle leasing and charging through Octopus Electric Vehicles
- Heat pump design, installation, and manufacturing
By spinning out Kraken, Octopus Energy can sharpen its focus on energy supply and clean technology deployment, while still benefiting from Kraken’s innovation as a major shareholder and customer.
Financial context and long-term strategy
Despite strong revenue growth, Octopus Energy reported a pre-tax loss of £260.1 million for the year ending April 30, 2025. The loss was attributed to heavy investment in international expansion and continued development of the Kraken platform.
Group revenues rose 10 percent to £13.68 billion, reflecting strong customer growth and expansion into new markets including Germany, the United States, Japan, and Australia.
The additional €271.7 million investment into Octopus Energy will support:
- Further international market entry
- Expansion of renewable generation assets
- Scaling of EV and heat pump businesses
- Continued innovation across digital energy services
Why Kraken’s independence matters for utilities
Many utilities around the world are struggling with outdated IT systems that limit their ability to integrate renewables, support electrification, and offer flexible pricing. Kraken positions itself as a neutral, utility-first platform that can replace legacy systems without forcing utilities to adopt a specific retail or generation model.
Key capabilities include:
- Real-time billing and settlement
- Half-hourly and dynamic pricing support
- Demand flexibility and grid balancing
- Integration with smart meters and distributed energy resources
- Scalable customer service automation
This neutrality is one of the reasons Kraken’s independence is significant. Utilities can now adopt the platform without concerns about competing with Octopus Energy in their own markets.
Frequently asked questions
What is Octopus Energy?
Octopus Energy is the UK’s largest household energy supplier and a global clean energy group operating in 27 countries. It combines renewable generation, retail energy supply, electric vehicles, heat pumps, and energy software.
What is Kraken Technologies?
Kraken is an AI-powered operating system for utilities that manages customer accounts, billing, grid operations, and energy flexibility. It now supports more than 70 million accounts worldwide.
How much funding did Kraken raise?
Kraken raised €850 million in its first standalone funding round, valuing the company at €7.3 billion.
Who owns Kraken after the spin-out?
Kraken operates as an independent company. Octopus Energy retains a 13.7 percent stake and remains a strategic partner and customer.
Why did Octopus Energy spin out Kraken?
The spin-out allows Kraken to scale globally as a neutral technology platform while enabling Octopus Energy to focus on energy supply, renewables, and electrification.
Looking ahead
The Kraken spin-out marks one of the most significant technology transactions in Europe’s energy sector in 2025. It reflects a broader shift where software platforms are becoming central to the energy transition, not just supporting infrastructure but actively shaping how energy systems operate.
With strong backing from global investors and an established customer base, Kraken is now positioned to become a defining technology provider for utilities worldwide. For Octopus Energy, the move validates a decade-long strategy of building technology alongside energy businesses, proving that European-founded platforms can compete at global scale.
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