UK Government Takes £25 Million Stake in Kraken in Bid to Secure London IPO

The British government is taking a £25 million stake in Kraken, the technology company spun out of Octopus Energy, as it ramps up efforts to convince the firm to choose London for a future stock market listing.

Kraken was valued at $8.65 billion last month in a deal to sell a minority stake to an investor syndicate, marking the software business’s first standalone funding round since it was developed within Octopus Energy.

The government said the investment, made through the state-owned economic development lender British Business Bank (BBB), is intended “to help them grow and keep them here in the UK.”

The move follows comments last month from Greg Jackson, the high-profile founder of Octopus Energy, who said the London Stock Exchange lacked sufficient “dynamism.” He added that it was a “toss-up” whether the tech unit would list in London or New York.

Jackson, who also serves as a government adviser and a non-executive board member of the Cabinet Office, told the FT last week: “From a personal perspective, I would love to list in London, but ultimately the choice belongs to the shareholders, who are a global group of investors.”

A decision on the listing venue is expected within the next 18 months. The London Stock Exchange has struggled to attract technology companies and has been hit by a series of departures, including payments group Wise, which shifted its primary listing to New York last year.

Peter Kyle, the UK’s Business Minister, said in an interview with the FT that the government’s investment in Kraken “was not a bribe,” but acknowledged it was part of an effort to keep the company in the UK.

“I am keen that we use the resources we have as a state to invest in companies that have the ability to grow fast, create jobs and create wealth,” Kyle stated.

“I really hope that Kraken will list here, but it will do so on the merits of the London Stock Exchange… and the fact this is the best place in the world to grow a company.” He added that no conditions are attached to the BBB’s stake should Kraken choose to list elsewhere, but did not specify what would happen if it were acquired by a foreign buyer.

“I’m really open-minded and extremely pragmatic on this,” he said. “I see Kraken as a hugely innovative, disruptive… And it has the potential to be a great British business. Why would I not want to be a part of that?”

The BBB increased its funding capacity from £15.6 billion to £25.6 billion during last summer’s spending review and is mandated to invest in companies that can deliver economic growth.

The £25 million stake in Kraken is part of a wider £125 million investment by the BBB into life sciences, deep tech, and artificial intelligence. Kyle noted that the significant investment in Kraken reflects the BBB’s bolder stance, adding that it had previously been too risk-averse.

The Business Minister said he is promoting London to companies by highlighting that in the US they would find themselves “in a big sea of competitors.”

The London Stock Exchange assures IPO candidates that larger companies will be quickly included in FTSE indices, providing an investment boost from tracker funds. Inclusion in the S&P 500 can often take longer.

Kraken’s recent investors include D1 Capital Partners, Fidelity, and a unit of the Ontario Teachers’ Pension Plan. Its early backers include Australia’s Origin Energy, Japan’s Tokyo Gas, the Canada Pension Plan Investment Board, and Al Gore’s Generation Investment Management.

Jackson said that while he was encouraged by policy and regulatory changes, such as reforms to UK listing rules, “capital was key to where companies choose to list.”

“Ultimately, it is a shame that, wherever we list, the result will probably be richer Canadian pensioners than British ones,” Jackson said. “I hope that in the future British pensioners will benefit more from the growth companies that start here.”

According to figures from Octopus Energy, Kraken had 73 million accounts in April 2025, an increase from 51 million the previous year. The company said its recurring revenue doubled to £422 million in the year ending April 2025.

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