Octopus Energy Spins Off Kraken Utility Billing and AI Platform
Key Points
- Octopus Energy announced the spin‑off of its Kraken platform.
- Kraken handles utility billing, meter management and AI‑driven grid optimisation.
- The platform serves over 7.7 million UK households and 2.8 million abroad.
- Committed annual revenue from other utilities underpins Kraken’s independence.
- Spin‑off aims to avoid conflicts of interest with non‑Octopus utilities.
- Kraken’s AI models analyze usage data to integrate renewables and distributed resources.
- Potential IPO could value Kraken at a substantial multiple of its revenue.
Octopus Energy announced the spin‑off of Kraken, its technology platform that handles utility billing, meter management and artificial‑intelligence‑driven grid optimisation. The move follows commitments of annual revenue from other utilities and positions Kraken to work with power providers beyond Octopus without conflicts of interest. Kraken originated as Octopus’s internal demo client, now serving millions of households in the UK and abroad, and integrates AI models to balance renewable energy on the grid while offering flexible tariffs that encourage customers to shift usage to periods of surplus supply.
Background and Rationale
Octopus Energy, a British renewable‑energy provider, said it is separating Kraken, the technology platform that powers its utility billing, meter management and customer‑relationship functions. The decision is driven in part by commitments of annual revenue from other utilities and energy providers, which give Kraken a solid financial base outside Octopus’s own customer base.
Kraken’s Origins and Growth
Kraken began as Octopus’s initial product, originally created as a demo client for the company’s own operations. Over time, the platform expanded dramatically, now serving power to more than 7.7 million households in the United Kingdom and an additional 2.8 million households elsewhere. This growth reflects Octopus’s rapid rise to become the UK’s largest energy provider, overtaking long‑established competitors.
Benefits of the Spin‑Off
By spinning off Kraken, Octopus aims to minimise potential conflicts of interest when the platform signs contracts with utilities and power providers that are not part of Octopus. The separation allows Kraken to operate as an independent technology provider, positioning it for broader market adoption and possibly an initial public offering within a year, which could value the business at a substantial multiple of its revenue.
Technology and Innovation
Kraken incorporates artificial‑intelligence models that analyse large volumes of data collected from Octopus’s innovative customer programmes. These programmes include tariffs that encourage users to shift electricity consumption to times when the grid has a surplus of renewable generation, sometimes allowing customers to run appliances for free. The AI helps determine how increasing amounts of renewable energy, solar, distributed energy resources, electric‑vehicle chargers, smart thermostats and home batteries can be balanced on the grid.
Beyond AI‑driven grid optimisation, Kraken provides a comprehensive customer‑management system covering billing, meter management and customer relations. This end‑to‑end solution enables utilities to call on diverse power sources as needed, supporting the integration of renewables and distributed resources into the electricity system.
Strategic Outlook
Octopus originally set the spin‑off in motion last year, and the move now formalises Kraken’s status as an independent entity. With committed revenue streams and a proven track record of scaling to serve millions of customers, Kraken is positioned to become a key technology partner for utilities seeking to modernise billing and enhance grid flexibility through AI‑driven solutions.