Octopus Energy Group is to spin out its Kraken technology at valuation of $8.65bn, with a funding round led by D1 Capital Partners, alongside other new investors such as Fidelity International, Durable Capital Partners and Ontario Teachers' Pension Plan Board.

This round sees new and existing investors acquiring $1bn of Kraken equity to fund both Octopus and Kraken. Investors led by Octopus Capital are also injecting a further $320m into Octopus for innovation and growth. Collectively, these almost double Octopus Energy Group’s balance sheet. After the split, Octopus will retain a 13.7 per cent stake in Kraken.

Octopus suffered an annual pretax loss recently, mainly due to business expansion, paying back a government loan for taking over Bulb Energy and lower energy demand due to warmer weather. However, total group revenues, including contracts, rose 10 per cent to £13.68bn.

Following the demerger, Kraken will operate with independent governance and leadership.

Spinning out Kraken will allow the company to work with even more energy partners, with the AI‑powered operating system now contracted to serve over 70 million accounts worldwide through licensing agreements with major utilities.

Greg Jackson, founder of Octopus Energy Group, said: “Kraken is in a class of its own, in terms of technology, capability, and scale. 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.”

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