December 31: Octopus spins off Kraken at $8.65bn; IPO venue in focus
Octopus Energy Kraken will be spun off at a $8.65bn valuation after a $1bn round led by D1 Capital, putting a Kraken Technologies IPO firmly on the table. Octopus will retain a 13.7% stake, with most proceeds funding expansion. For UK investors, Octopus Energy Kraken is a timely test of the London IPO market’s pull versus New York. We explain what the deal means, why the venue choice matters, and what to track as capital flows into UK energy-tech.
What the spin-off means for investors
The deal prices the platform at $8.65bn, roughly £6.8bn at recent rates, after a $1bn raise led by D1 Capital. Octopus will retain a 13.7% stake as Kraken becomes a separate company. Management says most new capital supports growth, product and market expansion. This creates a clearer valuation for the software unit while leaving Octopus Energy focused on supply and services.
A large, independent energy software player can help deepen the UK’s tech ecosystem. If Kraken scales, it could attract talent and partners around smart tariffs, heat pumps and flexibility services. For investors, a pure-play platform may command higher multiples than a bundled utility. Watch for governance, dilution and customer concentration as the business pursues faster growth.
IPO venue: London or New York
Management has flagged both London and New York as options, with timing not announced. A US float could bring deeper liquidity and higher software multiples, while a UK listing would signal confidence in domestic markets. The BBC outlined the spin-off and funding details here: BBC.
The decision is a live test for the London IPO market. A local listing could boost sentiment and keep more growth capital onshore. A US listing might highlight valuation gaps. The Times reported the venue tension and potential US tilt: The Times.
Business model and growth drivers
Kraken is an AI-enabled software stack for energy retailers and grid services. It supports billing, customer care, smart tariffs and flexibility operations. The model looks like enterprise software with long contracts and recurring fees. Investors should assess unit economics, churn, implementation times and pricing power. Clear disclosures will be key if a Kraken Technologies IPO proceeds.
Most proceeds will go to expansion. Expect investment in engineering, data, AI features and international reach. Partnerships with utilities and grid operators can open new markets. For UK readers, this is also an Octopus Energy funding milestone that could create jobs and supplier opportunities. Execution discipline and customer wins will determine how fast revenue compounds.
Risks and what to watch next
Revenue may rely on a limited number of large utility clients. Energy policy shifts, pricing regulation and market volatility can affect software demand. Competitive pressure from incumbent platforms and new AI entrants is rising. If Kraken lists in the US, investors face currency and governance differences. Delivery risk on rapid hiring and product rollouts also matters.
Before any offering, look for audited financials, revenue growth, gross margin, cash burn and retention metrics. Pipeline visibility, backlog quality and net revenue retention will be useful signals. Watch governance terms, especially any dual-class structure. Venue decision, use of proceeds and path to profitability will shape valuation and investor appetite for Octopus Energy Kraken.
Final Thoughts
Octopus Energy Kraken now has its own valuation at $8.65bn after a $1bn round, with Octopus retaining 13.7%. The next catalyst is the IPO venue. A London listing would boost the local market and keep growth stories at home. A New York float may deliver higher software multiples and deeper liquidity. Investors should track governance, revenue quality and margin trends, not just headlines. If disclosures show strong retention and a robust pipeline, interest could be high. Until details are published, keep this on a watchlist and prepare questions for management as Octopus Energy Kraken moves toward a potential IPO.
FAQs
It is the AI-enabled software platform built by Octopus to run energy retail and flexibility services. It handles billing, customer care and smart tariffs. The spin-off sets a $8.65bn valuation after a $1bn raise. Investors see it as a pure-play energy-tech asset with potential recurring revenue.
No decision is announced. Management has signalled both venues are in play. A London listing could support the local market, while New York may offer higher software valuations. Watch official filings and press reports for timing and structure as Octopus Energy Kraken moves closer to listing.
The funding backs growth at Kraken while Octopus retains a 13.7% stake. Customers should see faster product development and more features. For investors, clearer separation can improve transparency around performance. The parent can focus on supply and services while the platform scales with partners and new markets.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
