Greg Jackson’s Octopus Energy has announced the spin-off of its technology arm Kraken to become a standalone business.
The group said the move is aimed at “speeding up the platform’s expansion across the globe” and allowing Kraken to “fast-track investments into its technology, expand into new energy markets and regions, and drive innovation”.
Kraken has $500m in committed annual revenue through licensing deals with the likes of EDF, E.ON Next, National Grid US, Origin Energy, Plenitude and Tokyo Gas.
Its AI-powered platform is also now contracted to serve over 70m household and business accounts worldwide.
As part of the spin-off, Tim Wan has been named as Kraken’s new chief financial officer.
Earlier this year, Octopus Energy became the UK’s largest energy supplier, now serving over 7.7m UK households.
‘I am so proud that the business is smashing it’
Greg Jackson, founder of the Octopus Energy Group, said: “We set out to create Kraken as a global platform to transform utilities and deliver the innovation, service and value that customers deserve.
“I am so proud that the business is smashing it – and is now such a huge and successful company in its own right.
“Under Amir’s leadership and with a remarkably talented team, Kraken is soaring to new heights.
“I set the embarrassingly low goal of 100,000,000 accounts by 2027. It looks like it’ll beat that and can now aim to serve a billion people over the next decade.”
Kraken given more ‘freedom to invest’
Amir Orad, CEO of Kraken, added: “Octopus has been a phenomenal founding partner and first client.
“Kraken is now a globally successful business in its own right, operating independently for some time – completing our journey to full independence is a strategic and inevitable next step.
“It gives us more freedom to invest, expand, and serve our utility clients equally.
“We’ll keep pushing innovation in the cloud, advancing our utility-grade AI and harnessing vast amounts of energy and grid data, while ensuring structural clarity for customers, investors, and partners.
“We are aiming to accelerate the energy transition and positively impact people around the world. This is an exciting next chapter for Kraken.”
Profit down at Octopus Energy as costs rise
In February, City AM reported that profit had been slashed at Octopus Energy as rising costs and falling sales ate into its margin during the giant’s latest financial year.
For the 12 months to 30 April 2024, the group reported a net profit of £83m, down from the £203m it posted in the prior year.
Its revenue also dipped from £12.54bn to £12.4bn over the same period. In its previous 12 months, the group’s revenue had tripled from £4bn.
In a statement, Octopus Energy Group said its UK energy retail business had taken on another £74m of costs “to keep customer bills lower during the energy crisis and support the ones most in need”.
The group added that its non-UK retail customer base had tripled to 1.2m while its global workforce surged from 4,800 to 8,500.
Octopus Energy Group has since said that figure has now jumped to 2.8m.
By CityAM
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