Octopus Energy’s Kraken Platform Emerges as UK’s Tech Unicorn Amid Global Expansion

The Rise of Kraken Technologies

Kraken Technologies, the software platform developed by UK energy supplier Octopus Energy, is reportedly becoming more valuable than the retail energy business that created it, according to recent analysis. The platform, which manages everything from billing to electric vehicle charging for utility companies worldwide, has grown into one of Britain’s most valuable technology startups of the past decade.

The Rise of Kraken Technologies
From Frustration to Innovation
Global Expansion and Market Position
Competitive Landscape and Industry Shifts
Corporate Restructuring and Future Plans
International Ambitions and Headquarters Strategy
Listing Decision Looms

From Frustration to Innovation

The platform’s origins trace back to a personal experience of current Kraken CEO Amir Orad, who reportedly encountered significant frustration when dealing with his own energy provider. Sources indicate that Orad had to contact nine different teams to resolve a billing issue, revealing the fragmentation in traditional energy systems. This experience highlighted what analysts suggest was a substantial market opportunity in streamlining energy management through unified software solutions.

Global Expansion and Market Position

Kraken has expanded far beyond its initial purpose of powering Octopus Energy’s operations. The report states that the platform now serves more than 70 million households and businesses worldwide, processing approximately 15 billion new data points daily. Major international energy companies including Origin Energy in Australia and Tokyo Gas in Japan have reportedly licensed the technology.

According to recent analysis by UBS, Kraken represents approximately $9 billion of Octopus’s total enterprise value of $15 billion. This valuation comes despite Octopus Energy having surpassed British Gas this year to dominate the UK retail energy market. The software platform’s higher margins as a “software as a service” business reportedly account for its disproportionate value contribution.

Competitive Landscape and Industry Shifts

The energy sector is undergoing significant transformation, with platforms like Kraken becoming increasingly vital. Analysts suggest that as energy markets fragment and renewable sources introduce more variability into supply, sophisticated software management has become essential. Electricity prices now fluctuate throughout the day as renewable generation changes, while more customers have solar panels and electric vehicles that can potentially feed power back to grids.

However, competition is growing. UBS analysts reportedly noted that rivals such as Ovo Energy’s Kaluza platform could potentially replicate Kraken’s capabilities. “We believe Kraken can and will be replicated,” the analysts wrote, according to the report.

Corporate Restructuring and Future Plans

Octopus Energy began spinning off Kraken Technologies into a separate company last month, with potential public listings in London or New York anticipated within the next one to two years. The separation raises questions about both entities’ futures, particularly since smaller UK energy suppliers have struggled in recent years. Octopus itself acquired more than 1.5 million customers from failed supplier Bulb in 2022.

One investor reportedly expressed concern about losing the financial strength that Kraken provides to Octopus Energy. However, Octopus founder and CEO Greg Jackson indicated this would be addressed by maintaining a stake in the spun-off software company.

International Ambitions and Headquarters Strategy

As Kraken expands globally, questions emerge about its national identity. CEO Amir Orad is based in New York and has recruited US software executives, including Tim Wan from Asana as chief financial officer. Orad reportedly stated that Kraken will “de facto become dual headquartered,” citing the depth of technology talent and scaling experience in the United States.

Nevertheless, sources indicate that London will remain Kraken’s primary hub, with Orad suggesting the US might represent at most “a quarter or a third of our business.” The platform’s only major US customer currently is National Grid in New York and Massachusetts, and analysts suggest there are more potential utility customers outside the United States than within it.

Listing Decision Looms

The upcoming public listing presents a significant decision for Kraken’s leadership. The choice between London, New York, or a dual listing will reportedly depend on multiple factors, including market conditions and strategic priorities. As one of the UK’s most successful technology exports in recent years, much attention will focus on where this “energy monster” ultimately chooses to make its public debut.