How Kraken’s Software Platform Became More Valuable Than Octopus Energy’s Retail Business

The Unlikely Birth of an Energy Tech Giant

When Amir Orad experienced firsthand the fragmented customer service nightmare of dealing with nine different utility teams for a single billing issue at his New York home, he recognized something remarkable: the very frustration that plagued energy consumers represented a massive market opportunity. Today, as CEO of Kraken Technologies, Orad leads the software platform that has not only transformed its parent company Octopus Energy but is rapidly becoming one of Britain’s most valuable technology exports.

The Unlikely Birth of an Energy Tech Giant
From Mythical Monster to Market Disruptor
Why Britain Became the Unlikely Breeding Ground
The Platform Eating the Energy World
The Spin-off Strategy and Competitive Threats
The Transatlantic Identity Question
Redefining Energy’s Future

From Mythical Monster to Market Disruptor

The platform’s name carries deliberate symbolism. Just as the legendary Kraken emerged from Scandinavian folklore to dominate the seas, Kraken Technologies has risen from within Octopus Energy to potentially overshadow its creator. What began as an internal solution to manage the UK energy supplier’s operations has evolved into a standalone technology business that could be worth approximately $9 billion – representing the majority of Octopus’s $15 billion enterprise value according to UBS estimates.

This valuation places Kraken among the most significant British technology startups of the past decade, a remarkable achievement for a platform developed specifically for the traditionally conservative energy sector. “Kraken was invented in London,” Orad emphasizes, highlighting the UK’s often-underestimated technological talent pool.

Why Britain Became the Unlikely Breeding Ground

The platform’s UK origins are no accident. While the United States dominates software innovation broadly, Britain’s energy market structure created unique conditions for disruption. The UK actively encouraged competition in energy supply and accelerated the transition to renewable sources far more aggressively than most US markets, where regulated monopolies still prevail across many states.

“The UK rewards innovation in energy and the US is the opposite,” Orad observes, pointing to the regulatory environment that enabled Octopus to develop and refine Kraken while competing against established incumbents. This competitive landscape forced rapid innovation in customer service, billing systems, and renewable energy integration – precisely the problems Kraken was built to solve.

The Platform Eating the Energy World

Kraken’s comprehensive approach distinguishes it from point solutions. The platform manages everything from customer billing and service to electric vehicle charging and solar panel integration – all through a unified system. This holistic approach has become increasingly vital as energy markets fragment and complexity grows.

With electricity prices fluctuating throughout the day based on renewable supply variations, and customers increasingly becoming both consumers and producers through solar panels and vehicle-to-grid technologies, the energy sector is undergoing what Orad describes as “more physical disruption than in 100 years.”

The platform now serves over 70 million households and businesses worldwide, processing a staggering 15 billion new data points daily. Its client roster includes major international energy companies like Australia’s Origin Energy and Japan’s Tokyo Gas, demonstrating its global appeal beyond its British origins.

The Spin-off Strategy and Competitive Threats

Octopus’s recent decision to spin off Kraken Technologies into a separate company marks a strategic pivot toward software-as-a-service as its primary growth engine. While Kraken contributed only a small portion of Octopus’s £8 billion revenue last year, its substantially higher margins and scalable business model make it far more valuable than the retail energy operations.

This move isn’t without risks. Some investors have valued the financial stability that Kraken provides to Octopus’s retail operations, especially during a period when smaller UK energy suppliers have collapsed. Octopus itself acquired more than 1.5 million customers from failed supplier Bulb in 2022.

Competition is also intensifying, with platforms like Ovo Energy’s Kaluza emerging as direct competitors. UBS analysts have noted that “We believe Kraken can and will be replicated,” suggesting the platform’s first-mover advantage may face challenges as the market matures.

The Transatlantic Identity Question

As Kraken prepares for a potential public listing within the next two years, its geographical identity presents complex questions. Despite its British origins, American influence is growing within the company. Orad operates from New York and has recruited US software executives including Tim Wan from Asana as chief financial officer.

The company plans to become “de facto dual headquartered,” leveraging American expertise in scaling software companies while maintaining its London foundation. Orad suggests the US might represent at most “a quarter or a third of our business,” with Kraken’s only major American clients currently being National Grid in New York and Massachusetts., as previous analysis

The ultimate test of this balance will come when Kraken decides where to list – London, New York, or potentially both. For now, Orad sees no need to choose: “I can have both. Why do I need to choose?” This pragmatic approach reflects the platform’s global ambitions while acknowledging the specialized market conditions that enabled its creation.

Redefining Energy’s Future

Kraken’s story represents a fundamental shift in how we conceptualize energy infrastructure. The platform demonstrates that the real value in tomorrow’s energy markets may lie not in generating or supplying power, but in managing the increasingly complex digital ecosystems that make modern energy systems function.

As renewable sources, smart devices, and prosumer technologies continue to transform energy markets, platforms like Kraken that can simplify complexity while enabling innovation position themselves at the center of a sector undergoing its most significant transformation in a century. The mythical sea monster has indeed awakened – and it’s swallowing the energy world not through destruction, but through digital transformation.