Origin Energy Ltd. said that Kraken Technologies Ltd., a software platform that enables utilities to manage the shift toward cleaner energy, has achieved a valuation of $8.65 billion following its first standalone capital raise.
Notably, the software platform has played a central role in Octopus Energy Group Ltd.’s rise to become the UK’s largest electricity supplier, as the company surpassed traditional incumbents and expanded its customer base to more than 7 million households. Meanwhile, Sydney-listed Origin Energy holds roughly a 20% stake in Octopus Energy.
According to a statement released on Tuesday, Kraken will raise $1 billion in equity through its first independent share sale involving both new and existing investors. As a result, the transaction will set the stage for a formal separation of the company from Octopus, which the company has targeted for the middle of next year.
“Origin has always held a deep conviction in the potential of Kraken, and we have been able to maintain our highly valuable equity stake in Kraken while supporting the continued expansion of Octopus Energy,” Origin Chief Executive Officer Frank Calabria said in the statement. Additionally, Origin confirmed that D1 Capital Partners will join as a new investor, alongside a “leading energy retailer” with more than 10 million customers that will also adopt Kraken as a client. Furthermore, Origin said it will invest $140 million as part of the overall process.
Earlier, in September, Octopus announced its plans to spin off the software platform. Since then, energy providers have licensed Kraken’s software to help balance electricity flows to households, particularly as energy-transition technologies such as electric vehicles, home batteries, solar panels, and heat pumps become more widespread.
At the same time, Origin agreed to waive its exclusivity to the software platform in Australia in exchange for an additional 1.5% equity stake, thereby offsetting dilution from the share sale. Consequently, following the equity raise and the separation of the software platform from Octopus, Origin will hold a direct ownership interest of 22.7% in Kraken as well as a 22.7% stake in Octopus.
Overall, suppliers that deploy Kraken’s software can offer more competitive pricing and targeted incentives to customers, encouraging flexible energy usage. These capabilities help utilities manage the volatility in power flows associated with a grid increasingly dominated by renewable energy sources, reinforcing Kraken’s strategic value in the global energy transition.
