Octopus Energy Eyes £10bn Kraken Demerger
Deal News | Jul 07, 2025 | Business Cloud
Octopus Energy is reportedly planning a major £10bn demerger of its technology platform Kraken, according to Sky News. The demerger would aim to separate Kraken from the group, offering shares to Octopus's existing investors, which include prominent entities like Generation Investment Management and Canada Pension Plan Investment Board. A 20% stake would be sold to external investors to establish Kraken's valuation, potentially exceeding £10bn. Octopus Energy, which has a significant market position in the UK with 7.5 million customers and a 24% market share, has a record of investing in various energy technology firms. Investment banks Citi, Goldman Sachs, JP Morgan, and Morgan Stanley are being considered to manage the demerger process. Kraken, a technology platform that manages energy devices and customer billing, potentially alleviates customer conflict of interest fears and services over 70 million customer accounts worldwide.
Sectors
- Energy
- Technology
- Investment Banking
Geography
- United Kingdom – Octopus Energy is based in the UK with a significant market share, and many of Kraken’s clients, such as EON and EDF Energy, are also in the UK.
- International – Kraken's services extend to countries like Australia, Japan, France, and the US, indicating its global operational reach.
Industry
- Energy – Relevant because Octopus Energy is one of the biggest energy suppliers in the UK and Kraken is a platform for managing energy devices.
- Technology – Kraken is a technology platform that integrates customer billing and energy management systems, highlighting the technological aspect of the demerger.
- Investment Banking – Banking firms such as Citi, Goldman Sachs, JP Morgan, and Morgan Stanley are involved in pitching for the demerger mandate.
Financials
- £10bn – Potential valuation for Kraken in the demerger.
- £7.2bn – Valuation of Octopus Energy in an investment round last year.
- 20% – The minority stake in Kraken proposed to be sold to external investors.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Octopus Energy | Target Company | Company | The largest gas and electricity supplier in Britain, planning the demerger of its technology platform Kraken. |
| Kraken | Technology Platform | Company | A technology platform managing energy solutions and customer billing, potentially being spun off from Octopus Energy. |
| Generation Investment Management | Investor | Company | An investment firm co-founded by Al Gore, a current investor in Octopus Energy. |
| Canada Pension Plan Investment Board | Investor | Company | A current investor in Octopus's ventures. |
| Citi | Potential Financial Advisor | Company | Investment bank invited to pitch for the demerger mandate. |
| Goldman Sachs | Potential Financial Advisor | Company | Investment bank invited to pitch for the demerger mandate. |
| JP Morgan | Potential Financial Advisor | Company | Investment bank invited to pitch for the demerger mandate. |
| Morgan Stanley | Potential Financial Advisor | Company | Investment bank invited to pitch for the demerger mandate. |