Octopus Energy is nearing a deal to sell a minority stake in its Kraken Technologies business, according to people familiar with the discussions, marking a significant step in the UK energy group’s efforts to unlock value from its fast-growing software arm.

The potential transaction would involve a partial sale rather than a full divestment, allowing Octopus to retain strategic control of Kraken while bringing in new investors at a valuation that could significantly exceed previous funding rounds.

Kraken provides customer billing, account management, and energy optimisation software and has become a central pillar of Octopus’s global expansion, supporting tens of millions of customer accounts across multiple countries and utility partners.

Interest in the business has been driven by its strong recurring revenues, scalability, and growing role in managing flexible energy systems as grids transition toward renewables.

Sources say discussions are at an advanced stage, though final terms and timing have not been formally confirmed and remain subject to change.

Octopus Energy has previously indicated that Kraken could ultimately be listed separately or brought in external capital to accelerate growth, while keeping the platform closely aligned with the group’s retail and generation ambitions.

The move comes as Octopus continues to expand internationally and invest heavily in technology to support electrification, smart tariffs, and grid flexibility.

A successful stake sale would further strengthen the company’s balance sheet and reinforce Kraken’s position as one of Europe’s most valuable energy technology platforms.