UK's £6.45bn Investment in Kraken Technologies Raises Questions Over Public Money
The British Business Bank (BBB), a state-owned organization tasked with driving economic growth by providing financing to smaller businesses, has announced a £25m equity investment in Kraken Technologies, a software platform valued at $8.65 billion. While the move may seem like a positive step for UK businesses, critics are questioning whether public money is being used wisely.
Kraken, which is being separated from its parent company Octopus Energy to go public on the stock market, fits the bill as a tech company but doesn't exactly align with the BBB's usual role in supporting small businesses. The firm's valuation puts it firmly in the FTSE 100 index, and its recurring revenues of $500 million make it unlikely that the BBB's investment made all the difference to its success.
Moreover, the majority of investors in Kraken's recent fundraising round were international firms, including a US-based fund. This raises questions about whether the BBB's involvement is more about generating a financial return than supporting UK businesses. The organization claims to have invested with "the intention of making a financial return," but this seems at odds with its stated mission.
The move has also sparked concerns over the BBB's investment mandate, which appears to have been quietly rewritten to allow for larger investments in established companies. With a permanent capital of £25.6 billion and the ability to make direct investments of up to £60 million, it may be that we can expect more significant stakes in firms like Kraken.
While it is impossible to say at this stage whether the investment will prove profitable, critics are calling for greater transparency over the BBB's rules and objectives. With its supposed mission focused on driving economic growth by supporting smaller businesses, it seems that the organization has strayed from its roots with the Kraken investment – a case of "mission creep" in which public money is being used to prop up established companies rather than backing new startups.
The decision also raises questions about the UK government's priorities, particularly in relation to Kraken's eventual choice of listing venue. While Peter Kyle, the business secretary, has tried to position the BBB's investment as a way to keep the company in the UK, it seems that these decisions are ultimately driven by where valuations are likely to be higher.
Ultimately, the £6.45 billion investment in Kraken Technologies highlights the need for greater scrutiny over public money and the British Business Bank's activities. As the organization continues to evolve and expand its capabilities, it is essential that policymakers ensure its actions align with its stated objectives – rather than leading to a case of "mission creep" that undermines its mission to drive economic growth through support of smaller businesses.
The British Business Bank (BBB), a state-owned organization tasked with driving economic growth by providing financing to smaller businesses, has announced a £25m equity investment in Kraken Technologies, a software platform valued at $8.65 billion. While the move may seem like a positive step for UK businesses, critics are questioning whether public money is being used wisely.
Kraken, which is being separated from its parent company Octopus Energy to go public on the stock market, fits the bill as a tech company but doesn't exactly align with the BBB's usual role in supporting small businesses. The firm's valuation puts it firmly in the FTSE 100 index, and its recurring revenues of $500 million make it unlikely that the BBB's investment made all the difference to its success.
Moreover, the majority of investors in Kraken's recent fundraising round were international firms, including a US-based fund. This raises questions about whether the BBB's involvement is more about generating a financial return than supporting UK businesses. The organization claims to have invested with "the intention of making a financial return," but this seems at odds with its stated mission.
The move has also sparked concerns over the BBB's investment mandate, which appears to have been quietly rewritten to allow for larger investments in established companies. With a permanent capital of £25.6 billion and the ability to make direct investments of up to £60 million, it may be that we can expect more significant stakes in firms like Kraken.
While it is impossible to say at this stage whether the investment will prove profitable, critics are calling for greater transparency over the BBB's rules and objectives. With its supposed mission focused on driving economic growth by supporting smaller businesses, it seems that the organization has strayed from its roots with the Kraken investment – a case of "mission creep" in which public money is being used to prop up established companies rather than backing new startups.
The decision also raises questions about the UK government's priorities, particularly in relation to Kraken's eventual choice of listing venue. While Peter Kyle, the business secretary, has tried to position the BBB's investment as a way to keep the company in the UK, it seems that these decisions are ultimately driven by where valuations are likely to be higher.
Ultimately, the £6.45 billion investment in Kraken Technologies highlights the need for greater scrutiny over public money and the British Business Bank's activities. As the organization continues to evolve and expand its capabilities, it is essential that policymakers ensure its actions align with its stated objectives – rather than leading to a case of "mission creep" that undermines its mission to drive economic growth through support of smaller businesses.
. and what's up with the investment mandate being rewritten? seems like they're just looking for a quick return on their public funds 
. shouldn't they be focusing on supporting new startups or helping small businesses that need a leg up? this whole thing feels like a case of 'mission creep' to me 
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. policymakers gotta step in and make sure public money is being used 4 good, not just 4 personal gain 
not exactly the vibe of the British Business Bank's usual role in supporting small businesses 
but it raises questions about priorities 
seems like they're trying to keep their mission creep under wraps 
. and what's up with all these international investors getting in on the action? shouldn't it be all about UK businesses? 
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This deal seems more like a way for international firms to get in on the action and make some cash