Octopus Energy Group recently made headlines with plans to spin off its technology arm, Kraken. If passed, this strategic move would completely alter the company’s financial picture and continue to fuel its plans for global domination. Founder and CEO Greg Jackson has said it’s a sure bet that Kraken will IPO before long. This decision could pave the way for a later initial public offering in either London or the United States.
The announcement has followed as Octopus scrambles to repair its financial position. The cash injection from the spin-off is projected to “almost double Octopus Energy Group’s already strong balance sheet,” enhancing its ability to fund further expansion. The investment will be used largely to scale up Octopus itself—most of the expected $1 billion investment will go straight to Octopus. The remainder would go to Kraken.
Kraken was originally designed for Octopus’s internal requirements. It’s now deployment to a growing roster of talented clients, including amongst others EDF, E.On Next, TalkTalk and National Grid US. The rapid rate of growth reflects Kraken’s deepening relevance and importance within the rapidly evolving energy technology sector.
Jackson said getting the share listing location choice right was “critical” for the success of Kraken. He stated that for a large tech firm like Kraken, the choice would ultimately be between London or the US markets. A listing in London would do much to prove that trend wrong. Numerous firms have chosen US exchanges over UK exchanges for their initial public offerings in recent times.
“If London can be the right place to list, I would love that,” – Greg Jackson
Recently released quarterly statements show that Octopus Energy Group continues to grow overall sales, up 10% (£13.7 billion). Jackson understood that the firm was in trouble. Warmer weather cooling energy demand and the planned cessation of energy crisis allowance payments in 2024 played into these challenges. Octopus’s bottom line was dented to the tune of £103 million from these elements.
In the midst of these major obstacles Jackson did highlight the workforce expansion that Octopus has achieved, adding 12,000 jobs to the UK’s workforce. Interestingly, 1,500 of these jobs have been credited to Kraken in isolation. The company has publicly committed to keeping its headquarters in the UK, which helps further undercut any arguments about the company’s commitment to its home economy.
“One thing about Kraken is we’ve got this global investor base… and so really the stock exchanges have got to kind of show why they are the right one for business,” – Greg Jackson
The energy sector is undergoing very rapid changes. Octopus Energy Group’s strategic decisions regarding Kraken will have a decisive impact on the platform’s trajectory. The spin-off and possible public listing promise to bring Kraken further financial security. This strategic shift could further position the company as a leader in the increasingly competitive global energy technology market.