British renewable energy provider Octopus Energy said this week that it’s spinning off Kraken, its tech platform for utilities, spurred in part by $500 million in committed annual revenue from other utilities and energy providers.
An eventual Kraken IPO could be valued at $15 billion and could occur within a year, according to The Wall Street Journal.
Kraken was actually the company’s initial product, per Octopus CEO Greg Jackson. “We created Octopus as the ‘demo client,’” he told the Journal earlier this year. That demo client has since grown to provide power to more than 7.7 million households in the U.K. and another 2.8 million elsewhere.
The spinoff would help Kraken minimize conflicts of interest as it signs deals with utilities and power providers that aren’t Octopus, the company said. Octopus originally set the spinoff in motion last year.
Octopus was founded in 2015, and within a decade became the U.K.’s largest energy provider, overtaking British Gas, which was founded more than 200 years ago.
Part of that growth has stemmed from creative marketing and customer-acquisition strategies.
One, called Zero Bills, allowed homeowners to eliminate their energy bills for a decade if they bought properties that were entirely electrified. Another, a tariff it calls Agile, encourages customers to shift their electricity use to times when there’s a surplus on the grid. In some cases, consumers can run loads of laundry for free.
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As Octopus gathered data from those projects, it used AI models built into Kraken to sift through it to determine how increasing amounts of renewable energy can work on the grid.
For utilities and power providers, Kraken allows them to call on power sources when needed, including renewables, solar, and so-called distributed energy resources, which include EV chargers, smart thermostats, and home batteries. It has also built a customer management system that covers everything from billing, meter management, and customer relations.