Origin Energy Strengthens Kraken Stake as Platform Valuation Emerges

About Origin Energy Limit

Origin Energy Limited ( ASX: ORG) is one of Australia’s largest integrated energy companies, with a diversified portfolio spanning electricity generation, energy retailing, gas exploration and production, and strategic investments in energy technology platforms. Headquartered in Sydney and listed on the ASX, Origin services millions of customers across the National Electricity Market while pursuing a long-term transition strategy focused on decarbonisation, digital capability and customer-centric innovation.

In addition to its core Australian operations, Origin has built a significant offshore growth platform through its investment in Octopus Energy and its wholly owned technology arm, Kraken Technologies. These investments have become central to Origin’s future-facing strategy, providing exposure to global energy retail digitisation and scalable software-based growth. The latest announcement regarding Kraken’s first standalone capital raising represents a major milestone in this strategy, revealing the standalone value of the platform while enabling both Kraken and Octopus Energy to pursue independent growth trajectories with strengthened balance sheets.

Kraken’s First Standalone Capital Raising

Kraken Technologies has completed a US$1 billion equity raising from a mix of new investors and existing shareholders, marking its first standalone funding round ahead of a planned legal and financial separation from Octopus Energy. The transaction provides a clear valuation reference for Kraken, with the platform valued at US$8.65 billion inclusive of US$150 million of cash retained in the business.

This capital raising is a pivotal step in the long-planned separation of Kraken and Octopus Energy, targeted for mid-2026 subject to regulatory approvals and rulings. Of the US$1 billion raised, US$150 million will remain within Kraken to support product development and global customer expansion, while US$850 million will be retained by Octopus Energy. In parallel, Octopus Capital and other investors will inject an additional US$320 million into Octopus Energy, further strengthening its growth capacity.

For Origin, the transaction represents the first time the value of Kraken has been independently benchmarked as a standalone entity, highlighting the scale and maturity the platform has achieved in a relatively short period.

Origin’s Continued Strategic Commitment

As part of the capital raising, Origin will invest US$140 million, equivalent to approximately A$210 million at current exchange rates. This investment includes participation in both the primary equity issue and a secondary sale process, reflecting Origin’s continued conviction in Kraken’s long-term growth potential.

In addition, Origin has agreed to waive its exclusivity to the Kraken platform in Australia. In exchange, Origin will receive an additional 1.5 per cent direct equity interest in Kraken, offsetting the dilution impact of the equity raising. Following completion of all transactions, Origin will hold a direct economic interest of 19.6 per cent in Kraken and an additional indirect interest of 3.1 per cent via its retained 22.7 per cent equity stake in Octopus Energy, leaving Origin’s total economic exposure to Kraken unchanged at 22.7 per cent.

Kraken’s Commercial Momentum and Platform Growth

Kraken has emerged as one of the world’s leading energy and utilities software platforms, providing end-to-end customer management, billing, asset optimisation and energy-trading capabilities. The platform is now contracted to support close to 100 million customer accounts globally, with annual recurring revenue more than doubling over the past 18 months.

As part of the latest announcement, Kraken confirmed it has signed a major new licensing agreement with a leading energy retailer, adding more than 10 million customer accounts to the platform. This new customer will also participate in the equity raising, providing both commercial validation and alignment between platform users and shareholders.

Kraken’s rapid growth reflects structural changes in global energy markets, where retailers and utilities are increasingly adopting cloud-native platforms to manage distributed energy resources, electrification, time-of-use pricing and customer engagement at scale.

Strategic Rationale for Separation From Octopus Energy

The separation of Kraken from Octopus Energy is designed to allow both businesses to optimise their capital structures and strategic focus. While Octopus Energy continues to expand internationally as a vertically integrated energy retailer, Kraken is positioning itself as a pure-play global technology provider, licensing its platform to utilities and energy companies across multiple jurisdictions.

For Origin, this separation enhances transparency around the value of each investment and provides flexibility in managing its capital allocation across core energy assets and growth-oriented technology platforms. It also allows Kraken to pursue customers that may compete with Origin in Australia, without undermining Origin’s economic exposure to the platform’s success.

Broader Industry Context

Digital platforms such as Kraken are increasingly viewed as critical enablers of the global energy transition. As power systems become more decentralised, software capable of managing millions of devices, real-time pricing and grid constraints is becoming essential infrastructure.

Utilities globally face pressure to modernise legacy IT systems, improve customer experience and integrate renewable and flexible assets. Kraken’s success highlights the growing value of scalable, software-driven solutions in a sector traditionally dominated by capital-intensive physical assets. For Origin, exposure to this trend provides diversification beyond commodity-linked earnings and positions the group to benefit from global energy digitisation regardless of local market conditions.

Outlook

Looking ahead, Origin Energy enters 2026 with a strengthened strategic position across both its domestic energy portfolio and its offshore technology investments. The crystallisation of Kraken’s valuation provides greater visibility into the value embedded within Origin’s balance sheet, while the retention of a significant equity stake preserves long-term upside.

Subject to regulatory approvals, the formal separation of Kraken from Octopus Energy is expected to unlock further strategic optionality for all parties. Meanwhile, Origin remains focused on executing its Australian energy transition strategy, balancing investment in renewables and firming capacity with disciplined capital management.

Conclusion

Origin Energy’s participation in Kraken Technologies’ first standalone US$1 billion capital raising marks a significant milestone in its global technology strategy. By supporting Kraken’s separation and retaining a substantial economic interest, Origin has reinforced its exposure to one of the world’s most valuable energy software platforms while enabling both Kraken and Octopus Energy to accelerate growth independently. The transaction underscores Origin’s long-term vision of combining core energy operations with scalable digital platforms to create enduring shareholder value.