Kraken: Octopus Energy’s Software Platform on the Rise Kraken’s Growth and Ambitions

Kraken, the software platform developed by Octopus Energy, is stepping out of its parent company’s shadow. Originally built to manage Octopus’s energy services, Kraken has grown to serve over 60 million accounts worldwide, including in Australia and Japan. Founder Greg Jackson predicts the platform will exceed 100 million accounts by 2027, describing the goal as “embarrassingly unambitious.”

Kraken supports energy providers by simplifying the complexities of renewable energy management. As energy grids shift from centralised gas and coal plants to renewable sources like wind and solar, Kraken’s data-driven tools help utilities and households optimise energy use and costs.

Competing in a Dynamic Energy Market

Kraken faces competition from platforms like Kaluza, Ovo Energy’s software arm, which secured significant funding in 2024, and Centrica’s Ensek. However, Kraken’s ability to crunch billions of data points daily gives it a competitive edge. Utilities using Kraken can create flexible tariffs and integrate technologies like solar panels and electric vehicle chargers to maximise efficiency.

Financial and Strategic Success

By April 2023, Kraken managed accounts for third-party providers, contributing to pre-tax profits of £20.8 million—nearly 10% of Octopus’s earnings. This success has attracted high-profile investors, including Al Gore’s Generation Investment Management and the Canada Pension Plan Investment Board, pushing Octopus’s valuation to $9 billion in 2024.

Prominent clients, such as EDF in the UK and Tokyo Gas in Japan, have adopted Kraken’s technology. The platform’s ability to cut operating costs and enhance customer satisfaction—evidenced by improved Trustpilot scores for EDF—further demonstrates its impact.

Challenges in Adoption

Despite its achievements, Kraken faces challenges in convincing heavily regulated utilities to adopt its system. Transitioning to new technology during a complex energy shift requires overcoming technical and project risks. However, Kraken’s growing roster of high-quality clients underscores its credibility.

Driving Innovation in Energy Management

Kraken’s capabilities extend beyond traditional utilities. The platform manages pricing zones, enabling households to earn payments for reducing electricity use during peak demand. With updates occurring hundreds of times daily, Kraken’s dynamic nature sets it apart from legacy systems.

The Road Ahead

As Kraken gains traction, speculation about a potential spin-out from Octopus Energy grows. Former BT chief executive Gavin Patterson has been appointed chair, highlighting the platform’s ambitions. While Kraken operates independently, its connection to Octopus fosters continuous innovation.

Conclusion

Kraken exemplifies the future of energy management, seamlessly integrating renewable energy with cutting-edge technology. As it scales globally, Kraken positions itself as a leader in the energy transition, offering innovative solutions to utilities and consumers alike. The platform’s success reflects the broader shift towards sustainable, efficient energy systems, promising a brighter future for the industry.

Source: (FT.com)