Octopus Energy To Spin Off AI unit Kraken At $8.65bn value

British renewable energy company Octopus Energy is preparing to spin off its artificial intelligence and software arm, Kraken Technologies, in a move that could lead to a future stock market listing.

Octopus has raised $1 billion in Kraken’s first independent funding round. This values the company at $8.65 billion, according to Origin Energy, a major investor in Octopus. The funding clears the way for Kraken to become a separate business, with the split expected to happen by mid-2026.

Origin Energy said it will invest $140 million in the process. The funding round also included D1 Capital Partners, led by Daniel Sundheim, along with a large, unnamed Kraken customer.

Kraken provides energy management software to major utility companies such as EDF and E.ON. The platform helps power companies manage customer accounts, billing, and energy usage more efficiently. Its annual recurring revenue has more than doubled in the past 18 months, showing strong demand for its technology.

After the spin-off, Octopus Energy will keep a 13.7% stake in Kraken, while Origin Energy will hold 22.7%. Origin’s CEO, Frank Calabria, said the deal puts both companies in a strong position for future growth.

Kraken CEO Amir Orad said the company has benefited from being part of Octopus, as more energy firms have adopted its technology. He described Kraken as a “modern operating system for utilities.”

Orad also said that while a public listing is possible in the future, Kraken is focused on becoming a pure software company first. Over time, he expects more long-term investors from the technology sector to join as the company grows.