Origin Energy Fuels Kraken’s $1B Raise, Retains Key Stake Ahead of Split
Origin Energy backs a landmark US$1 billion equity raise for Kraken Technologies, valuing the company at US$8.65 billion and maintaining a significant stake as Kraken prepares to separate from Octopus Energy.
- Kraken raises US$1 billion in first standalone equity round
- Origin invests US$140 million and retains 22.7% economic interest
- Kraken valued at US$8.65 billion standalone
- Major licensing deal adds over 10 million customer accounts
- Origin waives Australian exclusivity for additional 1.5% equity
Origin Energy’s Strategic Move
Origin Energy has taken a decisive step in the evolution of its energy technology arm, Kraken Technologies, by supporting a US$1 billion standalone equity raise. This move not only underscores Kraken’s rapid growth and global technology leadership but also sets the stage for its formal separation from Octopus Energy, targeted for mid-2026. Origin’s commitment includes a US$140 million investment, ensuring it retains a substantial 22.7% economic interest in Kraken post-transaction.
Valuation and Growth Prospects
The equity raise values Kraken at an impressive US$8.65 billion on a standalone basis, reflecting strong investor confidence and the company’s expanding footprint. This valuation comes on the back of Kraken more than doubling its contracted Annual Recurring Revenue in the past 18 months. The capital injection is designed to fuel Kraken’s ambitious growth plans, including a recently signed major licensing agreement with a leading energy retailer that adds over 10 million customer accounts to Kraken’s platform.
Separation from Octopus Energy
The transaction facilitates Kraken’s legal and financial separation from Octopus Energy, allowing both entities to pursue independent growth trajectories. While Kraken will retain US$150 million of the raised capital, Octopus Energy will benefit from US$850 million of the funds, supplemented by an additional $320 million from Octopus Capital and other investors. Origin will continue to hold a 22.7% stake in Octopus Energy, maintaining its strategic exposure to both businesses.
Waiving Exclusivity in Australia
In a notable development, Origin has agreed to waive its exclusivity rights to Kraken’s platform in Australia. In return, Origin receives an additional 1.5% equity stake in Kraken, offsetting dilution from the capital raise. This waiver opens the door for Kraken to license its platform to other Australian utilities, potentially accelerating its domestic market penetration and competitive positioning.
Looking Ahead
Origin’s CEO Frank Calabria highlighted the strategic rationale behind these moves, emphasizing the strengthened capital structure and focused growth potential for both Kraken and Octopus Energy. As Kraken nears its ambitious target of 100 million customer accounts, these transactions position the company to capitalize on its technological edge and expanding global footprint. Investors will be watching closely as regulatory approvals progress and the formal separation unfolds.
Bottom Line?
Origin’s bold capital and structural moves set Kraken and Octopus on distinct growth paths, with stakes and valuations primed for the next phase.
Questions in the middle?
- How will Kraken’s platform licensing to other Australian utilities impact Origin’s market position?
- What regulatory hurdles remain before Kraken’s formal separation from Octopus Energy?
- Can Kraken sustain its rapid customer growth to justify its elevated valuation?
