Octopus Energy branded electric vehicles parked in front of a modern suburban house on the 19th of March 2025 in Folkestone, United Kingdom. The house features rooftop solar panels, highlighting a commitment to renewable energy. The scene represents the growing adoption of sustainable energy solutions, with Octopus Energy playing a key role in promoting electric mobility and solar power integration. (photo by Andrew Aitchison / In pictures via Getty Images)
British renewable energy startup Octopus Energy is set to spin out its AI tech unit Kraken Technologies, setting the stage for a potential public listing.
Origin Energy, which holds a major stake in Octopus, said in a statement late on Monday that Octopus had raised $1 billion in its first standalone funding round, valuing the business at $8.65 billion. The funding round paves the way for the spinoff, with Octopus targeting a separation by mid-2026, Origin said.
The statement said "a major Kraken customer," which it did not name, and Daniel Sundheim's hedge fund D1 Capital Partners were involved in the investment round. Origin will also invest $140 million as part of the process.
"In signing this major new customer, Kraken is rapidly closing in on its 100 million customer account target well ahead of plan," said Origin CEO Frank Calabria.
Octopus Energy will retain a 13.7% stake in Kraken following the spin-out, while Origin's interest in Kraken remains at 22.7%.
"We believe these transactions put Octopus and Kraken in a strong position to unlock their next phase of growth, underpinned by the appropriate capital structure," Calabria added.
Kraken supplies energy software to utility companies, including EDF and E.ON. Its contracted annual recurring revenue more than doubled in the last 18 months, according to Origin Energy.
Earlier this year, Kraken CEO Amir Orad told CNBC's "Squawk Box Europe" that the company has a "very strong investor base" that focuses on energy and utilities.