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Octopus Energy Group has revealed its plan to divest Kraken, its rapidly growing AI-driven technology division, in a strategy devised to enhance its growth in international energy markets.
Kraken, initiated within Octopus in 2019, has emerged as one of the most sophisticated operating systems for utilities globally. The platform is currently engaged to oversee over 70 million residential and commercial accounts and manages 15 billion new data points daily.
The divestment is regarded as a significant strategic landmark for Octopus Energy, granting Kraken the autonomy and funding to broaden its technological offerings, penetrate new markets, and attract additional investment.
Octopus Energy has already transformed the UK energy landscape, becoming the nation’s largest energy provider earlier this year with 7.7 million households presently in its portfolio. Kraken’s technology underlies that achievement, facilitating adaptable pricing, equitable billing, and enhanced customer service.
On a global scale, Octopus now functions in 27 nations, catering to 2.8 million additional clients across France, Germany, Italy, Spain, and Japan. Its broader business includes EV leasing, solar energy, heat pumps, and a £7 billion renewable energy portfolio.
Greg Jackson, the founder of Octopus Energy, mentioned that the divestment signifies Kraken’s development into a substantial tech entity on its own: “We aimed to establish Kraken as a worldwide platform to revolutionize utilities and provide the innovation, service, and value that customers rightfully expect. I am incredibly proud that the business is excelling – and is now such a significant and thriving company independently. It appears poised to surpass my target of 100 million accounts by 2027 and can now strive to serve a billion individuals over the next decade.”
Kraken has quadrupled its contracted revenue within three years and now features $500 million in assured annual revenues from licensing arrangements with some of the globe’s largest utilities, including EDF, E.ON Next, National Grid US, Origin Energy, Plenitude, and Tokyo Gas.
Amir Orad, Kraken’s CEO, stated that the divestment was a “strategic and unavoidable next phase”: “Octopus has been an exceptional founding partner and first customer. Kraken is now a globally prosperous business in its own right, functioning independently for a while – reaching our full independence allows us greater freedom to invest, grow, and serve utility clients uniformly.”
Kraken recently secured its first fully integrated US utility client with National Grid and has also introduced a new solution tailored for commercial and industrial clients.
To bolster this upcoming phase, Kraken has appointed Tim Wan as its new CFO, bringing expertise from the US software company Asana, where he managed its successful IPO.
Orad mentioned that Kraken will now intensify its focus on cloud innovation, utility-grade AI, and energy data processing while ensuring “structural clarity” for customers, investors, and partners.
Kraken has positioned itself as a global leader in residential flexibility, managing over 2GW of power from EVs, home batteries, and heat pumps. This flexibility aids in balancing electricity grids by shifting energy usage to times of high renewable generation, reducing costs for consumers and diminishing reliance on fossil fuels.
The divestment is anticipated to enable Kraken to scale these capabilities more rapidly, enhancing its role in the energy transition at a moment when utilities encounter burgeoning demand for digital solutions.
Orad added: “We aim to speed up the energy transition and make a positive impact on individuals worldwide. This is an exhilarating next phase for Kraken.”
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