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Octopus Energy is making a big move. The UK-based renewable energy giant announced this week that it’s spinning off its tech arm, Kraken — the software platform that has quietly become a powerhouse in the utilities and energy world. The decision comes on the back of Kraken locking in a whopping $500 million in committed annual revenue from global utilities and energy providers.
And here’s the kicker: insiders say Kraken could go public within a year, with a potential valuation of around $15 billion, according to The Wall Street Journal.
What’s wild is Kraken wasn’t even an afterthought — it was the original product. Octopus CEO Greg Jackson explained that the company itself was basically built as a “demo client” for Kraken. That demo went on to become the UK’s largest energy supplier, now powering over 7.7 million homes in the UK and another 2.8 million across the globe. Talk about scaling your test run.
The spinoff is also a strategic play. By separating Kraken, Octopus avoids conflicts of interest when signing deals with energy companies that would otherwise be direct competitors. This process quietly kicked off last year, and now it’s gaining serious momentum.
Founded in 2015, Octopus has skyrocketed past long-standing rivals like British Gas (a 200-year-old institution!) in less than a decade. A lot of that growth comes down to bold ideas like its “Zero Bills” program — which wipes energy bills for 10 years if homeowners commit to fully electric properties — and its “Agile” tariff, which actually rewards customers for shifting energy usage during surplus hours.
Underneath all of that? Data. Kraken uses AI models to crunch insights from those programs, helping utilities figure out how to maximize renewables on the grid. It doesn’t just optimize power sources like solar or wind, but also taps into distributed energy assets like EV chargers, smart thermostats, and home batteries. On top of that, it runs the boring-but-crucial stuff: billing, metering, and customer service.
In short, Octopus may have started as a demo, but Kraken is shaping up to be the real star — and potentially one of the most valuable energy tech IPOs on the horizon.
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