Origin Energy-backed Kraken Technologies has been valued at nearly $13 billion after an equity raise that paves the way for the British software platform to be spun-off in mid-2026.
Origin, Australia’s biggest electricity and gas retail business, will invest about $210 million in Kraken as part of the latter’s first standalone equity raise of $US1b ($1.5b).
The equity raise paves the way for Kraken’s formal separation from UK-based parent company Octopus Energy, in which Origin is a major investor. The latest investment round values Kraken at $US8.65b.
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Kraken provides artificial intelligence software for energy utilities, managing everything from customer billing and service as well as the integration of solar, batteries, electric vehicles and heat pumps. It serves over 70 million household and business accounts worldwide.
While the equity raise would have diluted Origin’s stake, the Sydney-headquartered company has agreed to wave exclusive rights to the Kraken platform in Australia in exchange for an extra 1.5 per cent of the register. It means Origin retains a 22.7 per cent stake in Kraken.
While it is yet unknown what Origin will do with its stake, the transaction opens the door for it to sell down part or all of its holding once Kraken is listed, creating the opportunity for a cash windfall for shareholders.
Origin shares lifted one per cent to $11.38 at 2.05pm AEDT.
“We have been on a path to separate Octopus Energy and Kraken Technologies, and through execution of these transactions, have now laid the foundations necessary for this to occur and enable both the businesses to pursue their growth ambitions with greater focus and financial strength,” Origin chief executive Frank Calabria said in a statement.
“Origin has always held a deep conviction in the potential of Kraken, and we have been able to maintain our highly valuable equity stake in Kraken, while supporting the continued expansion of Octopus Energy.”
New York-based D1 Capital Partners will become one of the new investors in Kraken, Origin said, along with an unidentified “leading energy retailer” with more than 10 million clients that will also become a customer of the software platform.
Other new shareholders include Fidelity International, Durable Capital Partners and an arm of Ontario Teachers’ Pension Plan Board.
“In signing this major new customer, Kraken is rapidly closing in on its 100 million customer account target well ahead of plan,” Mr Calabria said.
Octopus in September confirmed it would spin-off Kraken to help accelerate the platform’s global expansion.
The demerger will enable Kraken to operate as a fully independent technology platform with its own governance and leadership, according to Octopus. It will allow the utility to focus on scaling its consumer, generation, and clean technology businesses, it said.
“Becoming an independent company gives Kraken the focus and freedom to scale as a neutral, global operating system for utilities, with Octopus Energy remaining a key innovation partner and forward-thinking global customer,” Kraken chief executive Amir Orad said.
