Octopus Energy Secures Funding for Kraken Technologies
Octopus Energy has finalized an agreement to divest a minority stake in its Kraken Technologies division, attributing a valuation of $8.65 billion (£6.4 billion) to the software enterprise. This strategic move lays the groundwork for a potential stock market debut.
As the largest gas and electricity supplier in the UK, Octopus has sold approximately $1 billion (£740 million) worth of equity in Kraken to a consortium comprising prominent investors, including global investment firm D1 Capital Partners, Fidelity International, and a branch of the Ontario Teachers’ Pension Plan.
The funds procured from this investment round will predominantly benefit Octopus Energy, although some will also be allocated to Kraken Technologies.
Additionally, Octopus expects to receive a further $320 million (£237 million) infusion from investors, primarily led by Octopus Capital—one of its principal stakeholders—with the intent to fuel “innovation and growth.”
Following this transaction, Octopus will maintain a 13.7% stake in Kraken Technologies. The company is poised to announce its annual results later today.
Greg Jackson, the founder of Octopus Energy Group, remarked, “Kraken is unparalleled in terms of technology, capability, and scale.”
He emphasized that as an independent entity bolstered by world-class investors and exceptional leadership, Kraken is well-positioned for accelerated growth, promising to become a notable success story rooted in the UK.
Octopus, which initially nurtured Kraken, is recognized as a vanguard of innovation and technology and is set to enhance its capabilities for transforming the global energy landscape.
Plans for the spinoff were declared in September, aiming to expedite Kraken Technologies’ international expansion. The prospect of a public offering, likely on either the London or New York Stock Exchange, looms as early as next September.
Amir Orad, CEO of Kraken, expressed that transitioning to an independent organization grants Kraken the focus and autonomy needed to evolve as a neutral, global operating system for utilities. He noted that Octopus Energy will continue as a vital innovation partner and forward-thinking customer.
Regarding the new influx of investors, Orad commented, “Their support will allow us to accelerate our impact on the energy transition, deepen collaborations with utilities worldwide, and modernize the energy system on a global scale. Our goal is to positively influence a billion lives within the next decade.”
Originally developed for Octopus, the Kraken platform now serves a multitude of utility clients, including EDF, E.On Next, TalkTalk, and National Grid US.
This strategic demerger occurs against the backdrop of Octopus Energy’s ongoing ascendance, having recently surpassed British Gas to establish itself as the UK’s foremost energy supplier, catering to 7.7 million households.
However, it was also disclosed that the company is among three retail energy firms yet to meet the financial resilience targets established by industry regulator Ofgem.
On Tuesday, Octopus articulated that this investment round, alongside the additional capital influx, is expected to “nearly double Octopus Energy Group’s already robust balance sheet.”
Source link: Ireland-live.ie.
