The UK's technology sector has received a significant boost as the government-backed British Business Bank announced a $33 million investment in Kraken Technologies. This strategic stake is part of a larger $1 billion demerger that will see the energy software giant spin out from its parent, Octopus Energy Group. The move underscores a concerted effort to nurture and retain high-growth technology firms within the United Kingdom.
A Strategic Government-Backed Investment
The $33 million commitment represents the British Business Bank's largest direct investment to date, signaling a more assertive approach to fostering domestic innovation. This investment follows recent reforms that expanded the bank's capacity to directly fund strategically important scale-ups. The capital is intended to support Kraken's continued growth and solidify its position in the global energy technology market.
Government officials framed the investment as a crucial step in preventing promising British companies from seeking growth capital abroad. Business Secretary Peter Kyle emphasized that the government is placing "big bets" on industries where the UK can lead. This proactive strategy aims to build national champions and create a supportive ecosystem for domestic scale-ups.
Leandros Kalisperas, the bank's Chief Investment Officer, stated it is critical to directly support fast-growing companies like Kraken. He described the deal as a demonstration of the bank's bolder co-investment strategy, with more significant deals planned. This approach showcases the UK's most promising enterprises on a global stage, reinforcing their strategic value.
Kraken's Independent Path and Global Ambitions
Kraken Technologies has developed a sophisticated AI-powered operating system designed to streamline operations for energy and utility companies. The platform manages everything from customer billing to smart meters, currently serving over 70 million accounts globally. Its technology drives efficiency and improves customer satisfaction for major utilities like EDF Energy and E.ON Next.
The demerger, which saw investors acquire approximately $1 billion in Kraken equity, establishes the company with an independent governance structure. This separation from Octopus Energy Group will enable Kraken to operate as a fully independent technology platform. The funding round was led by D1 Capital Partners and included other prominent global investors, accelerating its global adoption.
With a recent valuation of $8.65 billion, Kraken is now poised for its next phase of growth, which may include a public listing. Founder Greg Jackson has indicated a strong chance of a stock market flotation in the medium term, with London being a contender. This potential listing would mark a major milestone for the UK-founded company.
Cultivating a Competitive UK Tech Ecosystem
The investment in Kraken is part of a broader government initiative to bolster the UK's most innovative sectors. The British Business Bank has also committed $67 million each to two deep tech funds, Epidarex Capital and IQ Capital. These actions reflect a comprehensive strategy to provide catalytic capital to firms that can become future global leaders.
Industry leaders have welcomed the government's renewed focus on supporting scale-ups. Jordan Cummins of the Confederation of British Industry (CBI) praised the package as a positive step toward helping growing firms become global leaders. He noted that maximizing the bank's role is a smart move for UK competitiveness.
Kraken's leadership expressed strong support for the domestic backing, emphasizing the company's British roots despite its global reach. CEO Amir Orad noted the investment helps modernize global utilities while building a resilient and affordable energy system. This partnership is seen as a powerful model for exporting British technology and leading the energy revolution.
The British Business Bank's landmark investment in Kraken Technologies marks a pivotal moment for the UK's technology and energy sectors. It provides a significant capital injection for a rapidly expanding company and represents a clear government commitment to retain its most promising enterprises. As Kraken embarks on its independent journey, this backing strengthens its potential to become a global leader anchored in Britain.