Octopus Energy to sell stake in software spin-off Kraken at $8.65bn valuation | Octopus Energy
Octopus Energy has agreed to sell a stake in its Kraken software arm in a move that would value the division at $8.65bn (£6.4bn) and could pave the way for an IPO on the stock market.
The technology, which it has already licensed to some rival suppliers, is vital to the energy company’s success; It makes it easier to manage customer billing, smart meters, electric vehicle charging and home batteries to make using renewable energy cheaper.
Octopus said new investors, including asset manager Fidelity International and Ontario Teachers’ Pension Plan Board, have joined existing shareholders to buy a $1 billion stake in the business.
The share sale, which gives Octopus a 13.7% stake in Kraken, comes after Octopus announced in September that it planned to expand the division into an independent company.
Octopus founder Greg Jackson said in a statement: “Kraken is in a class of its own in terms of technology, talent and scale. As an independent company with world-class backers and exceptional leadership, it will be free to grow even faster and will be a true UK-based success story.”
Octopus is Britain’s largest household energy supplier, taking the crown in January from British Gas, which held that position for almost four decades after it was privatized under Margaret Thatcher.
Octopus, founded by Jackson in 2015, has grown as the government pushes to open the market beyond the big six energy companies. It became the UK’s largest home energy supplier in January, taking the crown from British Gas thanks to Kraken, which allows it to offer tariffs that take advantage of real-time electricity price fluctuations to lower bills.
The company has licensed Kraken for use by other energy suppliers in the UK, including E.ON, EDF and Good Energy. The software is also used by energy suppliers in other countries, including Tokyo Gas in Japan and Origin Energy in Australia.
Jackson told BBC Radio 4’s Today program that a stock market listing could be on the horizon and that the London Stock Exchange was one of the best candidates for an initial public offering of UK-based businesses.
“There’s a very good chance that Kraken will list at some point in the medium term. And look, for big tech companies like Kraken, I think it will be between London and the US. Personally, I really hope it’s London,” he said.
“The one thing about Kraken is that we have a global investor base. This is a global business. So exchanges need to show why they are the right exchanges for such a business.”
