Octopus Energy has appointed Goldman Sachs to oversee the planned demerger of Kraken Technologies, its rapidly expanding software platform, in a move expected to value the business at around $10bn (£7.9bn). The deal would mark a major milestone for the UK’s largest household energy supplier and reinforce its standing as one of the country’s most valuable private companies.
Minority Stake to Be Sold
Sources say Goldman Sachs will lead discussions with potential investors about buying a minority stake in Kraken, as well as handle the structuring of the demerger. The move was first reported in July and is seen as crucial in unlocking Kraken’s potential to grow independently of Octopus Energy’s supply business.
If the valuation is achieved, Octopus Energy’s total worth could rise to about £15bn — double the figure placed on the company little more than a year ago. Back then, fresh funding from Galvanize Climate Solutions and Lightrock valued the group at $9bn (£7.2bn). Other heavyweight investors include former US vice-president Al Gore’s Generation Investment Management and the Canada Pension Plan Investment Board.
Britain’s Biggest Energy Supplier
Founded in 2015 by Greg Jackson, Octopus Energy has enjoyed a meteoric rise in the UK’s energy market. In January this year it overtook Centrica’s British Gas to become the country’s largest household supplier, with 7.5m UK customers.
Its growth was boosted by the rescue of Bulb in 2022 — at the time the largest state bailout of an energy company — and the subsequent takeover of Shell’s domestic energy business. The company also serves an additional 2.5m customers overseas.
The expansion has made Jackson one of Britain’s most high-profile entrepreneurs and turned Octopus into a rare example of a UK-based energy group with genuine global reach.
Kraken: From Back Office to Global Platform
Kraken Technologies was originally developed as an in-house system to manage Octopus’s customer accounts and integrate renewable energy into its supply network. Over time it has evolved into a standalone product, now licensed to other suppliers both in the UK and abroad.
The platform handles everything from billing and customer service to the flexible management of devices such as heat pumps and electric vehicle chargers. Crucially, it supports the creation of smart grids — allowing consumers to use more renewable power when it is available in abundance, helping to cut costs and emissions.
In the UK, Kraken is licensed by rivals including EON and EDF Energy, as well as by Severn Trent Water and broadband provider Cuckoo. Overseas, clients include Origin Energy in Australia, Tokyo Gas in Japan, and Plenitude in southern Europe.
Global Ambitions
Kraken now manages more than 70m customer accounts globally, putting it well on course to hit its target of 100m by 2027. Greg Jackson has even suggested that the figure could soon be “embarrassingly unambitious”.
The business is chaired by Gavin Patterson, former chief executive of BT, and has been expanding its leadership team. Last year, it recruited Amir Orad, the former boss of US-listed NICE Actimize, as its first dedicated chief executive.
Kraken has also begun diversifying beyond energy. Earlier this year, it joined a consortium exploring a bid for crisis-hit Thames Water — a signal of its ambition to extend its technology into other essential services.
Why a Demerger Now?
Industry insiders say separating Kraken from Octopus’s supply arm will help remove a perceived conflict of interest. Some potential customers have been reluctant to use a system owned by a direct competitor.
By creating a distinct corporate structure, Octopus hopes Kraken will attract more clients — and more investment — as it positions itself as a global leader in energy technology.
The appointment of Goldman Sachs is a clear sign that Octopus intends to move quickly. While the scale of the minority stake to be sold is not yet confirmed, analysts say investor appetite for energy tech is strong, given the central role of smart grids and renewable integration in future energy systems.
Outlook
Octopus Energy declined to comment on the appointment of Goldman Sachs or the expected timetable for the deal. But the move is seen as a major step towards unlocking fresh growth and highlighting Britain’s role in the rapidly growing global energy-tech sector.
If Kraken does secure a $10bn valuation, it would represent one of the biggest success stories in the UK’s energy and technology industries — and underline how a company born out of the domestic retail energy market has become a global player.
