In a landmark deal for the UK's energy sector, Octopus Energy has agreed to sell a $1 billion (£740 million) minority stake in its innovative technology division, Kraken Technologies. The transaction places a staggering $8.65 billion (£6.4 billion) valuation on the software company and is seen as a precursor to a potential stock market flotation.
Major Investors Back Kraken's Future
The significant share sale, announced on 30 December 2025, involves a consortium of heavyweight global investors. The group includes D1 Capital Partners, Fidelity International, and a division of the Ontario Teachers' Pension Plan. This injection of capital is designed to fuel growth, with the majority of the funds expected to bolster Octopus Energy's own operations.
In a related move, an additional $320 million (£237 million) will be invested directly into Octopus Energy. This funding round is led by Octopus Capital, one of the energy giant's largest backers, and is earmarked for "innovation and growth". Following the completion of the deal, Octopus Energy Group will retain a 13.7% ownership stake in the now more independent Kraken.
Paving the Way for Global Expansion and IPO
The separation of Kraken into a standalone entity, first signalled in September, is a strategic play to accelerate its international growth. Kraken is an artificial intelligence (AI) driven platform used by energy suppliers worldwide, managing over 70 million household and business energy accounts. Its client roster includes major names like EDF, E.On Next, and National Grid US.
Industry speculation strongly suggests this move sets the stage for a public listing, potentially on the London or New York stock exchanges as soon as September next year. The independence is intended to allow Kraken to operate as a neutral global system for utilities, while maintaining Octopus as a key partner and customer.
Leadership Vision for an Independent Kraken
Greg Jackson, founder of Octopus Energy Group, hailed Kraken as being "in a class of its own". He stated, "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."
Echoing this sentiment, Kraken's Chief Executive, Amir Orad, said the independence grants the focus and freedom to scale. "Our goal is to positively impact a billion lives within a decade," Orad added, emphasising the platform's role in modernising the global energy system and supporting the transition to cleaner power.
Deal Strengthens Octopus Amid Regulatory Scrutiny
The transaction comes during a period of rapid expansion for Octopus Energy, which earlier this year overtook British Gas to become the UK's largest domestic energy supplier, serving 7.7 million homes. The company confirmed that this investment round will "almost double" its balance sheet, significantly boosting its financial resilience.
This strengthened financial position is notable, as Octopus was one of three retail energy firms this year that had not yet met Ofgem's financial resilience requirements. The substantial capital raise is expected to address such regulatory concerns head-on, providing a more robust foundation for its continued market leadership and innovation drive.
