Octopus Energy’s AI arm, Kraken Technologies, is poised for a significant shake-up, with plans to spin out as a standalone entity. This strategic move not only signals a potential public listing on the horizon but also underscores the burgeoning value of specialized AI solutions within the energy sector. The independent funding round, which garnered an impressive $1 billion, has propelled Kraken’s valuation to $8.65 billion. This infusion of capital is set to facilitate the separation from its parent company, Octopus Energy, with a target completion date of mid-2026.
The investment round saw participation from a major, unnamed Kraken client and D1 Capital Partners, a notable hedge fund managed by Daniel Sundheim. Origin Energy, a significant stakeholder in Octopus, is also injecting $140 million into the process. Frank Calabria, CEO of Origin Energy, highlighted the strategic importance of these developments, stating that the acquisition of a substantial new client by Kraken is accelerating its progress towards a previously set target of 100 million customer accounts.
Following the spin-out, Octopus Energy will maintain a 13.7% stake in Kraken, while Origin’s equity will stand at 22.7%. Calabria expressed confidence that these transactions will equip both Octopus and Kraken for their next growth phase, supported by an optimized capital structure.
Kraken Technologies operates at the intersection of AI and the energy industry, providing sophisticated software solutions to utility companies globally, including prominent players like EDF and E.ON. The company’s contracted annual recurring revenue has more than doubled in the past 18 months, a testament to the increasing demand for its advanced technological offerings.
Kraken’s journey has been closely intertwined with Octopus Energy, a relationship that has facilitated the adoption of its technology by a growing number of energy firms. This synergy has positioned Kraken as what its CEO, Amir Orad, describes as “the modern operating system for utilities.” Orad has previously alluded to the significant market opportunity for Kraken, emphasizing the company’s trajectory towards becoming a pure-play software entity. This strategic shift is expected to attract long-term, late-stage investors with a focus on software, evolving from its current investor base with a strong inclination towards the energy and utility sectors. The upcoming separation is anticipated to further refine this focus, aligning Kraken’s operational and financial strategy with its software-centric identity.
Original article, Author: Tobias. If you wish to reprint this article, please indicate the source:https://aicnbc.com/15130.html
