Octopus Energy: the tech company disguised as a utility

Octopus Energy is one of Europe's most compelling energy and software stories. Founded in the UK in 2015 and led by Greg Jackson, it began as a customer-centric green energy supplier. But its deeper strategic insight was that the utility business was held back by legacy operating systems: billing, switching, customer service, smart meter data, dynamic pricing and flexibility management.

Kraken emerged as the internal platform to run Octopus more efficiently, and then became a B2B operating system for utilities such as EDF, E.ON, Origin and Tokyo Gas. By FY25, Kraken managed 44.2 million live accounts, over 73 million contracted accounts, and £422 million in contracted annual recurring revenue. In December 2025, Kraken announced a standalone investment round at a reported .65 billion valuation as part of its path to formal independence.

The group's FY25 numbers tell the full story of the model: £13.7 billion in revenue, 8.4% gross margin, £90 million underlying EBITDA and a £255 million net loss. Retail energy is deliberately low-margin — but that complexity is exactly what makes the software credible.

Kraken's residential virtual power plant surpassed 2 GW with over 500,000 connected devices, shifting Octopus from billing into active management of demand, batteries, heat pumps and smart meters. Regulation — Ofgem, GDPR, the AI Act, financial resilience — is not a cost to manage: it is part of the product.

This episode explores the strategic shift from retail energy to utility software, the economics of a low-margin regulated market, the rise of residential flexibility and the risks around regulation, data, AI and capital intensity. The reusable playbook: enter a complex market where legacy software creates real friction, use the service as a laboratory, turn repeated operations into a platform only after operational proof, and make compliance a product feature rather than a downstream cost.

• Octopus Energy ha usato il retail energy come laboratorio operativo per costruire Kraken.
• Kraken è il vero asset strategico: un sistema operativo per utility che gestisce billing, dati, customer care, asset e flessibilità.
• Il business retail energia resta a margini sottili, ma proprio questa complessità rende credibile la piattaforma software.
• La virtual power plant residenziale mostra come case, EV, batterie, heat pump e smart meter possano diventare asset energetici distribuiti.
• Lo spin-off di Kraken serve anche a costruire neutralità verso utility incumbent che possono essere clienti e concorrenti.
• La regolazione non è un dettaglio: Ofgem, GDPR, smart meter data, AI Act e resilienza finanziaria diventano parte del prodotto.
• Il playbook riusabile è: entrare in un mercato complesso, usare il servizio come laboratorio, trasformare l'operation in piattaforma e fare della compliance una feature.