Battle for the Bourse: Kraken Hits £6.4bn Valuation as Octopus Prepares to Unleash Tech Giant

In a move that has sent shockwaves through the City, Octopus Energy has secured a landmark £750 million ($1 billion) investment for its technology arm, Kraken, valuing the software business at a staggering £6.4 billion ($9 billion). The deal, led by American heavyweights D1 Capital Partners and Fidelity International, marks the first time the “secret sauce” of Britain’s largest energy supplier has accepted standalone outside capital.

With a formal demerger slated for mid-2026, the focus has now shifted to a potential stock market flotation. The valuation cements Kraken’s status as one of the UK’s most formidable technology assets, while simultaneously intensifying the “tug-of-war” between the London Stock Exchange and New York for what promises to be one of the decade’s most significant IPOs.

A Global Operating System for Utilities

Originally developed as an in-house tool to manage Octopus’s own accounts, Kraken has evolved into a global “operating system” for the utility sector. The platform currently manages more than 70 million customer accounts worldwide for industry titans such as EDF, E.ON Next, and Tokyo Gas.

The recent funding round—which also saw participation from the Ontario Teachers’ Pension Plan and Durable Capital Partners—comes as Kraken reports annual contracted revenues exceeding £380 million ($500 million). Following the completion of the deal, Octopus Energy will retain a 13.7% stake in the business, with the remaining equity held by a mix of institutional backers and thousands of staff members.

The “No Brainer” Listing Dilemma

For the London Stock Exchange, the stakes could not be higher. Greg Jackson, the founder of Octopus, has recently hinted that choosing London for a future listing would be a “no brainer” if the UK market can demonstrate it is ready to support high-growth tech. However, the lure of New York’s deeper capital pools remains a significant threat.

In an attempt to tip the scales, the British Business Bank recently injected £25 million of taxpayer cash into the business—a move described by Business Secretary Peter Kyle as evidence of the government’s “hustle” to keep home-grown champions on British soil.

Key Figures at a Glance

Insightful Analysis: Can the UK Retain its Crown Jewel?

The rise of Kraken represents a pivotal moment for the UK’s post-Brexit industrial strategy. Unlike the traditional “big six” energy providers, Octopus has successfully pivoted into a high-margin software business, effectively using its retail arm—now the UK’s largest with a 24% market share—as a testing ground for Kraken’s AI-driven efficiencies.

However, the “murky waters” of the spin-off present risks. While independence gives Kraken the “freedom to scale” without the baggage of being tied to a direct competitor of its clients, the UK must prove it can offer the valuation multiples found on the Nasdaq. If Kraken ultimately floats in New York, it will serve as a damning indictment of the London market’s inability to retain its most innovative exports. For now, the “hustle” continues, but the clock is ticking toward a 2026 showdown.

Takeaways

• Kraken Technologies is now valued at £6.4bn following a £750m funding round.
• The business is spinning off from Octopus Energy to operate as a neutral global platform.
• A public listing is expected within two years, with London and New York both under consideration.
• The platform manages 70 million accounts and generates £380m in annual revenue.