Origin Energy puts $210m into spinout of Kraken from Octopus Energy

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.