The British Business Bank has invested £25m into Kraken, a software firm spun out of Octopus Energy. The deal is the bank’s largest ever direct investment into a private company.
Kraken provides software to utilities companies. Octopus Energy, Kraken’s parent company, announced in December last year that it plans to spin off the software firm into its own entity.
The British Business Bank (BBB) has taken a stake as part of a $1bn share sale, which values Kraken at $8.56bn.
The bank, which is a major LP in UK venture capital funds, also agreed to invest £50m apiece into two deep tech VC funds: Epidarex Capital, based in Edinburgh, and IQ Capital, which is based in London.
The Kraken investment follows reforms to the BBB’s mandate allowing it to take higher risk stakes in businesses working on areas prioritised in the UK’s Modern Industrial Strategy, such as advanced manufacturing and clean energy.
“We are placing big bets on the industries where Britain can win, backing our innovators with real firepower, and cutting the red tape that holds them back,” said UK business secretary Peter Kyle, speaking at Kraken’s headquarters on Monday.
Business secretary Kyle also announced several measures aimed at improving the conditions for UK businesses, including plans to allow virtual AGMs and streamline corporate reporting and consulting on ways to simplify competition investigations.
