The British 老九品茶 Bank is set to make a 拢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 老九品茶 Secretary Peter Kyle during a visit to the company鈥檚 London headquarters, where he unveiled a broader set of measures designed to support the government鈥檚 Modern Industrial Strategy, including regulatory reform and new funding commitments for priority sectors.聽
It follows reforms to the BBB鈥檚 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.聽
The platform is already used by major energy firms globally and is said to serve around 70 million customer accounts.聽
The London Stock Exchange is now under pressure to land the Kraken IPO and the 拢25m backing will come as welcome news.聽
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When discussing a flotation, Kraken founder and Octopus Energy CEO, Greg Jackson, told the Press Association that he would 鈥榣ove鈥� to choose London, but admitted it鈥檚 a 鈥榗oin toss鈥� between the UK and New York.
Alongside Kraken, the BBB will invest 拢50m each into two specialist funds focused on life sciences and DeepTech – Epidarex Capital and IQ Capital.聽
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.
鈥淔or too long, Britain鈥檚 most promising companies have had to look abroad for the backing they need to grow,鈥� said Kyle.
鈥淪cale-ups that should have become homegrown champions struggle against a system that is too slow and too fragmented. This package changes that.
鈥淲e 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.聽
鈥淭his is what decisive government looks like – creating an economy that can grow and deliver prosperity for all.鈥澛�
Jackson added: 鈥淥ver the past decade, we鈥檝e built Kraken from zero into a true powerhouse.聽
鈥淚t 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 老九品茶 Bank and Octopus Ventures, it鈥檚 poised to grow even faster and cement its position as a UK-founded, UK-funded success story.鈥�
The broader announcement also includes a push to cut administrative burdens on business, with ministers pledging to reduce the costs of regulation by 25%.聽
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 鈥渆ssential protections鈥�.
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.聽
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 拢180m allocated through the 拢452m Battery Innovation Programme set out in its Modern Industrial Strategy.聽
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.