Octopus Energy has announced it will spin off its lucrative software division, Kraken, as a separate company, confirming recent market chatter.
Founded in 2015, Octopus Energy — which supplies gas and electricity to customers in the UK and six other countries — recently recorded £159m in post-tax profit according to full-year results published in April, a 12% dip.
But in the same period, Kraken Technologies, which licenses software to other energy companies, saw profits surge 483% to £35m.
“It gives us more freedom to invest, expand, and serve our utility clients equally,” Amir Orad, CEO of Kraken said. Customers include EDF, E.ON Next, National Grid US, Origin Energy, Plenitude and Tokyo Gas.
Sky News reported that Octopus has engaged Goldman Sachs to oversee the demerger. Kraken has brought on a new CFO, Tim Wan, who previously worked at US software giant Asana.
Octopus has raised over $2bn from investors including Lightrock, Al Gore’s Generation Investment Management and Galvanize Climate Solutions. All funding had been raised by the Octopus parent company — it remains unclear how stakes in Kraken will be divided among current shareholders.
The demerger of Kraken has been long speculated about. Over the last few months, Octopus Energy founder Greg Jackson has sought to raise the profile of the tech arm in interviews, describing the rest of the business as “a demo client” for the real star: Kraken.
