UK energy powerhouse Octopus Energy is accelerating the global expansion of its technology arm, Kraken Technologies, by spinning it off as an independent company. Kraken, an AI-driven platform initially developed for Octopus’s operations, now serves more than 70 million household and business accounts worldwide, including major clients such as EDF, National Grid US, TalkTalk, and Tokyo Gas. This separation aims to allow Kraken to pursue growth and innovation more freely, while minimizing potential conflicts of interest among its diverse utility customers.

According to Octopus Energy’s announcement, Kraken has secured around £369 million ($500 million) in annual committed revenues through licensing deals, a figure that has quadrupled in just three years. Its CEO, Amir Orad, stressed that the formal spin-off reflects Kraken’s evolution into an independent, globally successful company, and will enable further investment and expansion. To support this transition, Tim Wan, former CFO at the US software firm Asana, has been appointed as Kraken’s new CFO.

Industry observers estimate Kraken’s valuation could reach as high as £11 billion (approximately $13.6 billion), with the company reportedly considering an initial public offering in London or New York within the next year. This move aligns with Octopus’s broader growth trajectory, having recently become the UK’s largest domestic electricity supplier by customer numbers after acquiring Shell Energy and expanding its operations into 18 countries. Investor confidence is reflected in recent funding rounds, pushing Octopus Energy’s valuation to around $9 billion, backed by heavyweight shareholders like Generation Investment Management and the Canada Pension Plan Investment Board.

Kraken’s technology leverages advanced analytics, artificial intelligence, and machine learning to manage green energy assets and optimise utility operations. The platform currently oversees the management of over 6 gigawatts of capacity across 45,000 energy assets, growing at a rapid monthly rate, with ambitions to double this scale in asset count and capacity by the end of 2023. One notable recent deal includes Kraken’s first US licensing agreement with Tenaska Power Services, targeting enhanced grid stability and revenue optimisation for customers in Texas.

EDF is another significant Kraken client, having migrated more than five million UK meter points onto the platform in collaboration with Accenture, aiming to create a more integrated and customer-centric energy business. Kraken combines electricity and gas data to provide utilities and consumers with better tools to manage energy use and costs, aligning with ongoing trends toward smarter, more flexible energy systems globally.

Octopus Energy’s founder, Greg Jackson, is bullish about Kraken’s future, setting ambitious goals to surpass servicing 100 million accounts by 2027 and eventually aiming to reach a billion users over the next decade. The spin-off represents a strategic shift designed to amplify Kraken’s market reach and technological innovation, underpinning Octopus’s vision of transforming the energy landscape and meeting fast-evolving customer and regulatory demands worldwide.

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Source: Noah Wire Services