Octopus Energy December 30: Kraken stake sale pegs value up to $10bn
Octopus Energy is preparing a sale of a 10–20% stake in its Kraken software arm at an $8.65–$10bn valuation, with D1 Capital, Fidelity and Ontario Teachers said to be involved. Goldman Sachs is running the Octopus Energy demerger. The move highlights strong demand for energy SaaS and could reshape how UK utilities buy tech. With 70m+ contracted accounts, Kraken’s growth matters for investors tracking energy digitisation and stable subscription revenue in Britain.
What the Kraken stake sale means
Octopus Energy plans to sell a minority stake in Kraken, valuing the platform between $8.65bn and $10bn. The reported buyer group includes D1 Capital, Fidelity and Ontario Teachers, while Goldman Sachs leads the process. A partial sale alongside the Octopus Energy demerger would set a clear market price for Kraken and create a separate capital structure for growth. Source
Kraken is a software platform that runs billing, customer service and flexibility operations for energy suppliers. With more than 70m contracted accounts, recurring revenue and long-term deals, it looks like a classic SaaS story. For UK-focused investors, that means potential for high margins, low churn and strong cash conversion, as utilities rely on stable software to cut cost-to-serve and improve service.
Impact on the UK energy market and customers
UK utilities face pressure to lower operating costs and handle more smart meter data. Kraken offers an integrated stack that can replace legacy systems and reduce time to serve. Strong funding could speed migrations and set a benchmark for procurement. Competitors in utility software will need clear value propositions on speed, data accuracy and developer tooling to keep pace with Kraken’s rollout.
If more suppliers move to modern platforms, customers could see faster issue resolution, clearer bills and better tariff innovation. Ofgem’s expectations on service quality and data transparency fit well with real-time software. Octopus Energy can also expand flexibility services that reward smart usage. Any migration must be smooth, so suppliers will need robust testing and service continuity plans.
Valuation, funding use and timing
Reports point to a valuation range of $8.65bn to $10bn. Origin Energy has referenced the $8.65bn mark after an equity raise, while UK media suggests interest up to $10bn, reflecting demand for energy SaaS with global scale. These data points help set expectations for a structured minority sale. Source
Fresh capital would likely fund product development, AI-driven automation and market entry costs. We expect more investment in grid flexibility tools, partner integrations and secure data capabilities to support larger enterprises. Clear separation from supply operations can also improve governance and reporting, which matters for winning big procurement deals and maintaining enterprise-grade reliability.
Final Thoughts
For UK investors, the Octopus Energy stake sale in Kraken signals a shift. Energy software at scale is attracting deep pools of capital, and the proposed $8.65–$10bn valuation sets a benchmark for utility tech. If the demerger proceeds, Kraken can raise and deploy capital on its own cycle, while Octopus Energy focuses on retail operations. The near-term watchlist is simple: confirm stake size, final valuation, and buyer mix, then track new enterprise wins and migration timelines. For portfolio positioning, consider how energy SaaS exposure complements broader infrastructure and renewables themes. Strong execution on reliability and customer outcomes will be the catalyst for the next leg of growth.
FAQs
Kraken is Octopus Energy’s cloud software that runs billing, customer service, and flexibility for energy suppliers. It supports more than 70 million contracted accounts globally. It is offered as SaaS to utilities and grid partners, aiming to cut cost-to-serve and improve service quality with real-time data.
Reports suggest Octopus Energy may sell 10–20% of Kraken. The deal pegs Kraken’s valuation between $8.65 billion and $10 billion. A minority sale would set a clear reference price for the platform and support growth investment without changing control of the business.
Customers should not see day-to-day disruption. Over time, more investment in Kraken could mean quicker support, clearer bills, and smarter tariffs. Any supplier migrations to Kraken must be carefully managed, with service continuity and data accuracy meeting Ofgem standards to protect households and small businesses.
There is no confirmed IPO timetable. The current focus appears to be a minority stake sale and the Octopus Energy demerger process. A clean separation can make future listings easier, but any IPO would depend on market conditions, growth metrics, and sustained enterprise deal momentum.
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.
