Origin Energy retains 22.7% stake in Kraken after equity raise and Australian exclusivity waiver

The Origin Energy Ltd (ASX: ORG) share price is in focus today after the company announced its involvement in Kraken Technologies’ first standalone capital raising, with Origin retaining a 22.7% economic interest and investing US$140 million (about $210 million).

What did Origin Energy report?

• Kraken Technologies to raise US$1 billion in first standalone equity round at a US$8.65 billion valuation
• Origin to invest US$140 million (~$210 million) as part of the raise
• Major new licensing agreement for Kraken adds over 10 million customer accounts
• Origin to receive an extra 1.5% equity in Kraken by waiving Australian exclusivity
• Following these transactions, Origin maintains a 22.7% economic interest in Kraken and Octopus Energy

What else do investors need to know?

This is the first time Kraken Technologies is raising capital as a standalone entity, supporting its formal split from Octopus Energy, which is targeted for mid-2026. The capital raise brings in a pool of new and existing investors, including D1 Capital Partners and a major new customer.

Origin’s decision to waive exclusivity rights to Kraken in Australia clears the way for other utilities to access the platform. In return, Origin increases its direct holding in Kraken, helping to offset dilution from the raise and future-proofs its position as the technology expands domestically and globally.

After all transactions, Origin will directly hold 19.6% of Kraken and a further 3.1% through its stake in Octopus Energy, keeping its overall interest steady. The deals remain subject to regulatory approval and are expected to take effect once Kraken separates from Octopus Energy.

What did Origin Energy management say?

Origin CEO Frank Calabria commented:

We have been on a path to separate Octopus Energy and Kraken Technologies, and through execution of these transactions, have now laid the foundations necessary for this to occur and enable both the businesses to pursue their growth ambitions with greater focus and financial strength.

Origin has always held a deep conviction in the potential of Kraken, and we have been able to maintain our highly valuable equity stake in Kraken, while supporting the continued expansion of Octopus Energy.

We believe these transactions put Octopus and Kraken in a strong position to unlock their next phase of growth, underpinned by the appropriate capital structure. We look forward to participating in the ongoing growth of both businesses.

What’s next for Origin Energy?

The planned separation of Kraken Technologies from Octopus Energy is expected to complete by mid-2026, giving both businesses clearer focus and flexibility to chase their own growth strategies. Origin’s ongoing stakes in both Kraken and Octopus place it well to benefit from their projected expansion, particularly as Kraken moves closer to its target of 100 million customer accounts ahead of schedule.

Origin also opens the door for new Australian utilities to use the Kraken platform, potentially growing the market and forming new domestic partnerships, while shoring up the value of its long-term investment.

Origin Energy share price snapshot

Over the past 12 months, Origin Energy shares have risen 4%, slightly trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 6% over the same period.

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The post Origin Energy retains 22.7% stake in Kraken after equity raise and Australian exclusivity waiver appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.