Octopus plans demerger of Kraken Technologies

Energy tech platform likely to exceed £10bn in value

Octopus Energy Group is planning a demerger of its hugely successful Kraken Technologies platform.

Sky News has reported that Britain’s largest energy retailer is in talks with investment banks to formally separate out Kraken Technologies from the Octopus Energy Group.

The deal is thought likely to exceed £10bn and will reinforce the reputation of Octopus Energy Group as a highly successful and valuable private company. It is expected to take place within 12 months.

Sources familiar with the matter told Sky News that existing investors in Octopus Energy will be given shares in the newly independent Kraken Technologies, with a minority stake in Kraken of up to 20% expected to be sold to external shareholders to help validate the technology platform's valuation.

If the deal proceeds as planned, it will be a significant chapter of a remarkable growth story.

Octopus Energy launched in 2016, and it currently has 7.5 million retail customers in Britain and 2.5 million elsewhere in the world. In January, it announced that it had overtaken British Gas to become the country's biggest supplier of energy, with a 24% market share.

Former Global Head of Data Science, Analytics and Engineering, David Sykes explained to Computing in 2024 that Kraken Technologies was central to the Octopus operating model.

The energy market that Octopus has so successfully disrupted was built on disparate and complex legacy systems which completely hemmed them in. Kraken Technologies is a full stack energy retail platform. It covers everything from CRM to smart metering data management to billing and communications and was critical to Octopus Energy Group’s mission to make decarbonisation attractive to consumers.

Octopus Energy began licencing Kraken Technologies in 2020, and it is now an independent company operating in Japan, US, New Zealand, Australia and most of mainland Europe in addition to the UK. In addition to Octopus Energy Group, Kraken Technologies is now licenced by Origin Energy, E.ON Next, EDF and Tokyo Energy.

The company has also expanded into the water and telco operating markets.