Octopus energy moves to spin off £10 billion tech arm Kraken

By LionHerald July 7, 2025 · 2 min read

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Octopus Energy, the UK’s largest household energy supplier, is preparing a major shake-up. The company plans to separate its technology platform, Kraken Technologies, into an independent business, valued at up to £10 billion.

According to reports, investment banks such as Goldman Sachs, Citi, JP Morgan, and Morgan Stanley have been approached to advise on the deal.The demerger is expected to be completed within the next year.

Octopus investors will receive shares in the new Kraken entity, and a minority stake, up to 20%, may be sold to outside investors to help confirm Kraken’s estimated value.

Kraken Technologies is the software backbone of Octopus’s operations, but it also powers systems for several other companies. In the UK, it supports E.ON, EDF, and Severn Trent Water.

Abroad, it operates for energy providers in countries including Australia, Japan, France, and the US. Kraken recently signed a major contract with National Grid in New York and Massachusetts, covering 6.5 million customers.

In total, Kraken’s platform now supports more than 70 million accounts worldwide, with a goal of reaching 100 million by 2027.

By separating Kraken, Octopus hopes to encourage more companies to use the platform. Some potential customers have reportedly been hesitant to license software from a direct competitor. Independence could remove that concern and expand Kraken’s client base further.

This corporate development comes as Octopus founder and CEO Greg Jackson is also leading a public push for “zonal pricing” in the UK electricity market. Under this model, energy prices would vary by region, based on local supply and demand.

Jackson argues it would save UK consumers at least £3.7 billion a year and bring the UK in line with other developed countries.

However, the proposal has faced strong resistance. Critics, including major energy companies and trade unions, claim zonal pricing would complicate infrastructure investment and increase uncertainty.

Some have also suggested Kraken would benefit financially from a more complex market. Jackson denies this, insisting Kraken operates on fixed license fees and does not earn money from market trading.

The debate has become increasingly tense. Jackson accuses opponents of aggressive lobbying and says he only recently understood the term “gaslighting” thanks to their tactics.

He argues that consumers are underrepresented in policy discussions and promises to keep pressing for reform, regardless of the government’s decision.

As the UK government nears a verdict on electricity market reform, Octopus is positioning itself for a new phase. Whether Kraken’s spin-off marks the beginning of a public listing, or simply a strategic restructuring, it signals Octopus’s growing confidence in its global tech ambitions.

For now, one thing is clear: the company isn’t just trying to sell energy. It’s trying to reshape the system itself.