British Business Bank Makes Its Biggest Direct Bet Yet on Energy Tech

When you think about government-backed banks, “taking big risks” isn’t usually the first thing that comes to mind. But the British Business Bank (BBB) is changing that perception. Recently, it announced its largest direct equity investment ever — a whopping £25 million in Kraken Technologies, the AI-driven energy software company spun out of Octopus Energy.

This move isn’t just a headline-grabbing number. It’s a sign that the UK is doubling down on energy tech, homegrown innovation, and strategic public investment — all while positioning itself as a serious player in the global clean energy transition.

A Bold Shift in Strategy

Historically, the BBB’s role was more of a connector than a direct investor. It mostly worked with venture capital funds, co-investing alongside private investors to help startups and scale-ups grow. Direct investments were rare and usually modest.

That’s why the Kraken deal is such a game-changer. With £25 million on the table, the BBB is showing it’s ready to take concentrated, strategic positions in companies that could define the UK’s technological future. In other words, this isn’t just about funding growth — it’s about building national champions.

Why Kraken Matters

Kraken Technologies is no ordinary startup. Its platform helps energy companies manage billing, customer service, and grid optimization using advanced AI. Today, Kraken handles over 70 million customer accounts worldwide, processing billions of data points daily.

Revenue has quadrupled in just a few years, with contracted revenue surpassing $500 million annually. The company is already a global leader in energy software and could be a future IPO candidate — potentially on the London Stock Exchange. For the UK, that’s a huge win: it means high-value tech talent, intellectual property, and economic activity stay in the country rather than moving overseas.

What This Investment Signals

The BBB’s move carries several implications for the UK economy:

1. Direct Equity is Here to Stay

This is the first major demonstration of a new approach: bold, direct investment in high-growth companies. Unlike previous indirect investments through funds, the BBB is now willing to take bigger, riskier bets that could yield massive economic and strategic returns.

2. Energy Transition Front and Center

Kraken isn’t just a software company; it’s a tool for the energy transition. Its AI-driven platform enables smarter grids, better integration of renewable energy, and more efficient energy management. Investing in Kraken aligns with the UK’s climate goals while also creating tech-driven solutions that can scale globally.

3. Strengthening the UK Tech Ecosystem

The UK has long faced a “scale-up gap” — promising startups often struggle to access the capital needed to grow into global leaders. By backing Kraken, the BBB is showing that the UK can nurture high-growth companies without losing them to overseas investors.

The Bigger Picture

This isn’t a one-off. The BBB has also made £50 million cornerstone commitments to two deep tech funds, targeting areas like AI, advanced engineering, and energy. These moves fit into a broader industrial strategy aimed at supporting scale-ups, boosting innovation, and ensuring Britain competes on the world stage.

Some critics warn about public capital being used for commercial ventures, questioning whether taxpayer money should take on such concentrated risk. But supporters argue that in a global market where countries like the US and EU heavily back tech, strategic investment is essential to remain competitive.

What Comes Next

For Kraken, the future looks bright. The company may pursue an IPO, expand internationally, and continue driving AI adoption across energy markets. For the BBB, this deal could serve as a blueprint for future investments — larger, more strategic bets that push innovation while creating tangible economic impact.

The big takeaway? The UK is no longer a passive observer in global energy tech. With bold investments like this, the country is positioning itself as a hub for innovation, a home for world-class startups, and a leader in the energy transition.

In short, the BBB isn’t just funding growth — it’s shaping the future of British tech.