Origin CEO Frank Calabria said, “we have been on a path to separate Octopus Energy and Kraken Technologies, and through execution of these transactions, have now laid the foundations necessary for this to occur and enable both the businesses to pursue their growth ambitions with greater focus and financial strength.”
“Origin has always held a deep conviction in the potential of Kraken, and we have been able to maintain our highly valuable equity stake in Kraken, while supporting the continued expansion of Octopus Energy.”
“Octopus Energy and Kraken Technologies, supported by their first-class management teams, have continued to deliver impressive growth. In signing this major new customer, Kraken is rapidly closing in on its 100 million customer account target well ahead of plan.”
“We believe these transactions put Octopus and Kraken in a strong position to unlock their next phase of growth, underpinned by the appropriate capital structure. We look forward to participating in the ongoing growth of both businesses,” Calabria said.
Kraken’s first standalone equity raising of USD 1 billion will welcome a pool of new investors including a new major Kraken customer, as well as other established public crossover investors led by D1 Capital Partners, to the Kraken register.
Origin will invest USD 140 million (approximately $210 million equivalent) as part of this process, which includes both a primary equity raise and a secondary sale process.
This process supports the legal and financial separation of Kraken from Octopus Energy by providing the capital required for both businesses to pursue independent growth paths. Of the USD 1 billion raised, USD 150 million will be retained in Kraken, with USD 850 million retained in Octopus Energy. In addition to this, Octopus Capital and other investors will inject a further $320 million in funding into Octopus Energy, which combined with the USD 850 million above will be deployed for future growth and other requirements.
The last equity transaction in March 2024 valued both Octopus Energy and Kraken combined at USD 9 billion. The latest valuation for Kraken alone is USD 8.65 billion, inclusive of the $150 million in cash retained. This reflects the value new investors are bringing to the company as well as the underlying growth potential, with contracted Annual Recurring Revenue now having more than doubled in the last 18 months. This is also in addition to the significant value Origin ascribes to Octopus Energy, which continues its own rapid international growth trajectory.
Post-separation, Octopus Energy will retain a 13.7% interest in Kraken as the foundation customer.
The suite of transactions remains subject to regulatory approvals and rulings and takes effect upon formal separation of Kraken from Octopus Energy, which is anticipated in mid-2026 calendar year.
In a separate agreement to support the future growth of Kraken, Origin has agreed to waive its exclusivity to the Kraken platform in Australia.
In exchange for waiving its exclusivity, Origin will receive an additional 1.5% equity directly in Kraken. Following this agreement, Kraken can licence its leading platform to other utilities in Australia unconditionally.
After taking into account the stake retained by Octopus Energy and the dilution associated with new Kraken shares issued, Origin will hold a direct interest in Kraken of 19.6%, in addition to an indirect interest of 3.1% held through Origin’s equity interest in Octopus Energy, which is unchanged by this process at 22.7%.
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