Octopus Energy has agreed a deal to sell a minority stake in its Kraken Technologies unit, valuing the software business at $8.65bn (£6.4bn) and paving the way for its eventual listing on the stock market.
The UK energy giant – Britain's largest gas and electricity supplier – has sold about $1 billion (£740 million) worth of Kraken shares to a consortium of investors including global investment firm D1 Capital Partners, Fidelity International and the unit of the Ontario Teachers' Pension Plan.
The investment round will use cash to fund both Octopus and Kraken, but it is understood that the majority of the proceeds will benefit Octopus Energy.
Octopus said a further $320m (£237m) would also be injected into Octopus by investors led by Octopus Capital – one of Octopus Energy's largest investors – to fund “innovation and growth”.
Octopus, which will report its annual results later on Tuesday, will retain a 13.7% stake in Kraken Technologies following the split.
Greg Jackson, founder of Octopus Energy Group, said: “Kraken is in a class of its own in terms of technology, capabilities and scale.
“As an independent company with world-class support and outstanding leadership, it will be positioned to grow even faster and become a true UK-based success story.
“Since its creation, Kraken Octopus has become a powerhouse of innovation and technology, and will now have even greater potential to transform the energy industry around the world.”
In September, Octopus announced plans to spin off Kraken Technologies.
Kraken is an artificial intelligence (AI) platform used by global energy retailers that aggregates more than 70 million energy bills for households and businesses.
The split is intended to help accelerate Kraken's global expansion, with reports suggesting that Kraken could go public with a stock exchange listing, likely in London or New York, by September next year.
Amir Orad, chief executive of Kraken, said: “Becoming an independent company gives Kraken the focus and freedom to scale as a neutral global operating system for utilities, while Octopus Energy remains a key innovative partner and forward-thinking global customer.”
Speaking about attracting new investors, he added: “With their support, we can accelerate our impact on the energy transition, deepen partnerships with utilities around the world and help modernize the energy system on a global scale – our goal is to positively impact a billion lives within a decade.”
Kraken was originally created to use Octopus, but has since acquired numerous other utility clients, including EDF, E.On Next, TalkTalk and National Grid US.
