Britain’s Octopus Energy will spin off its technology arm, Kraken, as an independent company valued at US$8.65 billion ($12.91 billion), after a funding round led by US investment firm D1 Capital Partners.
Kraken supplies energy software to major utilities and energy groups, including Origin Energy, EDF, National Grid US and Tokyo Gas.
Its AI-powered operating system is contracted to serve more than 70 million accounts. In September, Kraken reported contracted annual revenue of more than US$500 million.
New and existing investors will buy about US$1 billion of equity in Kraken, including Origin Energy which said it would invest US$140 million ($210 million).
Investors led by Octopus Capital will also inject an additional US$320 million into Octopus Energy, the company said in a statement.
The investment clears the way for Kraken’s formal demerger from Octopus Energy, which will retain a 13.7 percent stake in the firm.
The Financial Times reported that the demerger clears the path for a Kraken IPO within two years, potentially leading to an eventual flotation of the privately-held Octopus Energy.
Reuters could not immediately verify the report on Kraken’s potential listing plans.
Octopus Energy and Kraken did not immediately respond to a Reuters’ request for comment.
Origin Energy – which is using Kraken to transform its retail business – said it would maintain a 22.7 percent interest in the platform after the transaction.
Origin also agreed to waive exclusivity for Kraken’s services in Australia in exchange for an additional 1.5 percent equity interest.