The UK government is making its largest direct equity investment to date in an energy technology company, committing £25 million to Kraken Technologies as the AI-powered utility platform is spun out of Octopus Energy.
The investment, made through the British Business Bank, forms part of a roughly $1 billion equity round that will see Kraken operate as a fully independent company with its own capital structure, governance, and leadership.
For the British Business Bank, the deal marks a clear shift in strategy. The investment follows reforms to its mandate in 2025 that expanded its ability to make larger, more concentrated investments in strategically important UK scale-ups, rather than relying primarily on fund-based deployment.
The Bank has increasingly framed direct co-investments as a way to support companies seen as critical to the UK’s industrial and technological competitiveness, particularly as competition for growth capital intensifies globally.
Kraken, which was developed inside Octopus Energy before being spun out, has grown into one of the world’s largest utility software platforms. It is contracted to serve more than 70 million customer accounts globally through licensing agreements with major utilities and processes more than 15 billion data points per day across billing, customer service and energy system optimisation.
In September, Kraken said its contracted annual revenue had exceeded $500 million, quadrupling in three years. Recent transactions have valued the business in the high single-digit billions of dollars, placing it among the most valuable energy-focused software companies globally.
The government’s backing also comes as attention turns to Kraken’s longer-term capital markets future. The company is widely viewed as a potential IPO candidate, with a decision on listing venue expected within the next 18 months. UK officials have been increasingly vocal about the need to retain fast-growing technology companies within domestic capital markets, amid concerns that London is losing ground to New York for high-profile listings.
By supporting Kraken at this stage, the government is signalling both confidence in energy software as a strategic growth sector and a willingness to deploy state-backed capital more assertively to support companies it sees as future national champions.
By Charles Kennedy for Oilprice.com
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