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Government steps in with £25m investment to keep AI firms listed in London. The government has made a £25 million investment in Kraken technologies in a bid to persuade the fast-growing artificial intelligence business to list in London rather than New York. The investment, made by the British Business Bank, is the state lender's largest direct commitment to a single company to date and forms part of Kraken's wider $1 billion funding round ahead of its demerger from Octopus Energy. Ministers hope the backing will help anchor the $9 billion AI platform in the UK and support a future flotation on the London Stock Exchange, amid growing concern about Britain's ability to retain high-growth technology firms. Speaking during a visit to Kraken's London headquarters, business secretary Peter Kyle said the investment formed part of a broader £125 million package designed to help scale-up companies grow and list domestically. "I want Kraken to be known as a British success," Kyle said. "I want the London Stock Exchange to be a beacon for global investors as well as British companies looking to go public." Kraken is an AI-powered software platform that manages billing and customer services for energy companies. Originally developed by Octopus Energy, the platform has been licensed to several rival suppliers and now handles billing for around half of all UK households, as well as roughly 55 million households worldwide. Last month, Kraken secured a $1 billion investment from new and existing shareholders as part of its separation from Octopus Energy, valuing the business at $8.65 billion. Greg Jackson, founder of Octopus Energy and a government adviser, said he would personally prefer to see Kraken list in London, but acknowledged competition from overseas markets. "The UK has to win it on its merits," he said. "Having the British Business Bank at the table means it can influence whether a listing ends up in London or New York." Jackson said Kraken could be ready to list as early as 2027, but stressed there was no fixed timetable. "It will be about when the company is ready," he said. The move comes amid heightened scrutiny of the UK's capital markets following a wave of de-listings, aborted IPO plans and companies shifting their primary listings overseas, particularly to the United States. While there have been tentative signs of recovery in London's IPO market, ministers are under pressure to demonstrate that Britain can support companies through the crucial scale-up phase. Alongside the Kraken investment, the government announced two £50 million commitments to life sciences and technology funds, including Epidarex Capital and IQ Capital, as part of what Kyle described as "big bets on the industries where Britain can win". The government has also pledged £180 million for battery research and development through a £452 million innovation programme under its industrial strategy, and is pressing ahead with plans to reduce regulation, including reviews of health and safety and agricultural technology rules. The role of the British Business Bank has been expanded following Labour's spending review and industrial strategy last year. The bank, which is headquartered in Sheffield and was established in 2014 to improve access to finance for UK businesses, received £6.6 billion in new capital in June, taking its total financial capacity to £25.6 billion. Kyle, who took over as business secretary in September, said the aim was to ensure Britain's most promising companies grow at home rather than being sold or listing overseas. "We are the start-up capital of Europe," he said. "But we are not yet good enough at scaling and keeping businesses here, to build here, grow here and expand here. Too often, companies reach a certain size and then move on." Ministers say targeted state-backed investment in sectors such as AI, life sciences and advanced batteries will be critical if the UK is to compete with the deep capital markets of the United States and retain its next generation of global technology champions.

British Business Bank sets record with £25m Kraken investment. The move, which was revealed by the government among a flurry of announcements, marks bank's largest-ever direct investment The British Business Bank is set to make a £25 million investment in Kraken Technologies, marking its largest-ever direct investment. The funding is part of a wider package aimed at helping high-growth UK companies scale up at home rather than turning overseas for backing. The announcement was made by Business Secretary Peter Kyle during a visit to the company's London headquarters, where he unveiled a broader set of measures designed to support the government's Modern Industrial Strategy, including regulatory reform and new funding commitments for priority sectors. It follows reforms to the BBB's mandate, giving it greater flexibility to take larger, higher-risk stakes in strategically important scaleups. It also comes shortly after it was revealed that Kraken would demerge from Octopus Energy Group. Following the demerger, the business raised $1 billion in a round led by D1 Capital Partners just before the New Year, as IPO rumours reached boiling point. Kraken develops software that uses artificial intelligence to improve customer service and billing for energy companies. The platform is already used by major energy firms globally and is said to serve around 70 million customer accounts. The London Stock Exchange is now under pressure to land the Kraken IPO and the £25m backing will come as welcome news. When discussing a flotation, Kraken founder and Octopus Energy CEO, Greg Jackson, told the Press Association that he would 'love' to choose London, but admitted it's a 'coin toss' between the UK and New York. Alongside Kraken, the BBB will invest £50m each into two specialist funds focused on life sciences and DeepTech - Epidarex Capital and IQ Capital. The government said these moves are part of an effort to ensure the UK retains a stronger pipeline of globally competitive companies in key growth sectors. "For too long, Britain's most promising companies have had to look abroad for the backing they need to grow," said Kyle. "Scale-ups that should have become homegrown champions struggle against a system that is too slow and too fragmented. This package changes that. "We are placing big bets on the industries where Britain can win, backing our innovators with real firepower, and cutting the red tape that holds them back. "This is what decisive government looks like - creating an economy that can grow and deliver prosperity for all." Jackson added: "Over the past decade, we've built Kraken from zero into a true powerhouse. "It now plays in a league of its own and is ready to spin out of Octopus - and with backing from world-class investors like the British Business Bank and Octopus Ventures, it's poised to grow even faster and cement its position as a UK-founded, UK-funded success story." The broader announcement also includes a push to cut administrative burdens on business, with ministers pledging to reduce the costs of regulation by 25%. This will include regulatory reviews aimed at simplifying health and safety rules and streamlining farming and AgriTech regulation, while maintaining what the government described as "essential protections". The government also confirmed it is scrapping the Audit Reform Bill to avoid what it said would have been significant additional costs for large firms. It is pressing ahead with plans to allow virtual AGMs and simplify corporate reporting requirements, and will launch a consultation on 20th January to speed up and simplify competition investigations. As part of the same package, the government announced its largest single commitment to battery research and development, with £180m allocated through the £452m Battery Innovation Programme set out in its Modern Industrial Strategy. Ministers said the funding will support R&D projects and investor partnership grants, helping battery startups and scale ups attract match-funded private capital while keeping growth anchored in the UK.

Peter Kyle, the UK business secretary, said the government investment in Kraken was part of a move to keep it based in the UK.