What's Happening?
Origin Energy has announced a significant investment of $210 million in the spinout of Kraken, the technology arm of Britain's Octopus Energy. Kraken, which provides AI-powered energy software to major
utilities and energy groups, is set to become an independent company valued at approximately $12.91 billion. This move follows a funding round led by D1 Capital Partners, a US investment firm. Kraken's operating system is currently contracted to serve over 70 million accounts, with reported annual revenue exceeding $500 million. The investment by Origin Energy, along with other investors, will facilitate Kraken's formal demerger from Octopus Energy, which will retain a 13.7 percent stake in the company. The demerger is expected to clear the path for a potential initial public offering (IPO) of Kraken within the next two years.
Why It's Important?
This investment and the subsequent spinout of Kraken highlight the growing importance of AI-powered solutions in the energy sector. By becoming an independent entity, Kraken can potentially expand its reach and influence in the global energy market. For Origin Energy, this investment represents a strategic move to enhance its retail business through advanced technology. The potential IPO of Kraken could attract significant investor interest, reflecting confidence in the scalability and profitability of AI-driven energy solutions. This development underscores a broader trend of digital transformation within the energy industry, as companies seek to leverage technology to improve efficiency and customer service.
What's Next?
Following the demerger, Kraken is expected to focus on expanding its market presence and preparing for a potential IPO. The company may seek to increase its customer base and enhance its technology offerings to attract more investors. Origin Energy, having waived exclusivity for Kraken's services in Australia, will likely explore new partnerships and opportunities to integrate Kraken's technology into its operations. The energy sector will be closely watching Kraken's progress, as its success could influence other companies to pursue similar technological advancements.
