WEBVTT - Amir Orad, CEO of Kraken Technologies Talks Clean Energy

0:00:02.520 --> 0:00:07.360
<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

0:00:07.880 --> 0:00:11.120
<v Speaker 2>Octopus, Energy Group Planning too spin off. It's Cracking Technology

0:00:11.240 --> 0:00:14.800
<v Speaker 2>software platform unit. If you're not familiar, well, energy companies

0:00:14.800 --> 0:00:18.000
<v Speaker 2>definitely are. Cracking is a software platform, as we mentioned,

0:00:18.079 --> 0:00:21.800
<v Speaker 2>a company, it helps utilities manage the transition to cleaner energy.

0:00:22.079 --> 0:00:23.880
<v Speaker 2>And we've got a great guest to explain what it's

0:00:23.920 --> 0:00:24.960
<v Speaker 2>all about. What's going on.

0:00:25.040 --> 0:00:27.720
<v Speaker 3>I'm here, alrit is here, CEO of Cracking Technologies. As

0:00:27.760 --> 0:00:30.440
<v Speaker 3>the company bio notes, he's a multi time CEO, entrepreneur,

0:00:31.160 --> 0:00:34.040
<v Speaker 3>and an AI analytics, cyber and fintech veteran. He's here

0:00:34.040 --> 0:00:36.600
<v Speaker 3>in the studio with us. Welcome, How are you very good?

0:00:36.640 --> 0:00:37.000
<v Speaker 1>Thank you.

0:00:37.080 --> 0:00:39.960
<v Speaker 3>Look, as Carol mentioned, energy companies are very familiar with

0:00:40.000 --> 0:00:42.120
<v Speaker 3>what you do. But if people think about utilities and

0:00:42.159 --> 0:00:45.440
<v Speaker 3>the transition to renewables, how does your company help them

0:00:45.440 --> 0:00:45.640
<v Speaker 3>do that?

0:00:46.200 --> 0:00:49.440
<v Speaker 1>So every utility on the planet is evolving these days

0:00:49.560 --> 0:00:52.440
<v Speaker 1>because the technology behind the energy is evolving. You have

0:00:52.479 --> 0:00:56.400
<v Speaker 1>from electricity at every home, smarts homes, evs although it's renewable,

0:00:56.520 --> 0:01:00.680
<v Speaker 1>solar and the like, vainly to modernize ver entire infrastructure,

0:01:01.000 --> 0:01:05.520
<v Speaker 1>from building into communication, from hard price to modern technology.

0:01:05.560 --> 0:01:06.399
<v Speaker 1>We help him do that.

0:01:06.560 --> 0:01:10.480
<v Speaker 3>Hold on, I thought the president is canceling wind projects

0:01:10.560 --> 0:01:14.080
<v Speaker 3>and he's talking about drill drilling more in the US

0:01:14.120 --> 0:01:16.880
<v Speaker 3>and building nuclear. Look, nuclear takes a really long time.

0:01:16.920 --> 0:01:20.119
<v Speaker 3>We've spent a lot of time talking about that. Are

0:01:20.240 --> 0:01:23.039
<v Speaker 3>utilities pulling back on renewables?

0:01:23.959 --> 0:01:26.640
<v Speaker 1>The state with the most investment in renewable right now

0:01:26.720 --> 0:01:32.679
<v Speaker 1>is Texas. It's cheaper, Solar is cheaper, more accessible, more affordable.

0:01:33.200 --> 0:01:36.640
<v Speaker 1>You can bite faster than building a nuclear power plants

0:01:36.720 --> 0:01:39.800
<v Speaker 1>more solar investments than any other energy form. It's a

0:01:39.880 --> 0:01:41.320
<v Speaker 1>political can it be done?

0:01:41.800 --> 0:01:45.080
<v Speaker 3>Even with tariffs on hardware that comes from China?

0:01:45.400 --> 0:01:48.639
<v Speaker 1>Obviously it's more expensive that way, But in general, solo

0:01:48.720 --> 0:01:51.640
<v Speaker 1>became so cheap and it's getting cheaper every day that

0:01:51.720 --> 0:01:54.200
<v Speaker 1>everyone are moving to that. But it's a mix. It's

0:01:54.200 --> 0:01:57.400
<v Speaker 1>never just so all wind or nuclear. It's always a mix.

0:01:57.840 --> 0:02:00.400
<v Speaker 2>Well, so I'm still trying to unders down what you

0:02:00.440 --> 0:02:02.840
<v Speaker 2>guys do your platform, So what are you helping energy

0:02:02.840 --> 0:02:03.400
<v Speaker 2>companies do.

0:02:03.640 --> 0:02:06.800
<v Speaker 1>I'll give you an example. If you have your colling

0:02:06.800 --> 0:02:09.000
<v Speaker 1>your home during the summer, or you have an electric

0:02:09.080 --> 0:02:11.440
<v Speaker 1>vehicle you charge at seven pm when you get home,

0:02:11.680 --> 0:02:14.720
<v Speaker 1>that creates a massive spike on the grid. And the

0:02:14.760 --> 0:02:17.200
<v Speaker 1>issue is the grid is actually built for the maximum

0:02:17.200 --> 0:02:19.760
<v Speaker 1>point in time, so every spike is really expensive for

0:02:19.840 --> 0:02:22.840
<v Speaker 1>us as consumers. What we do is help manage that spike,

0:02:23.240 --> 0:02:26.080
<v Speaker 1>spread it a bit. Maybe we charge your car a

0:02:26.080 --> 0:02:28.800
<v Speaker 1>bit later at night so on as you wake up

0:02:28.840 --> 0:02:31.639
<v Speaker 1>and you have enough juice, Maybe we cool your home

0:02:31.720 --> 0:02:35.440
<v Speaker 1>slightly differently during the day. That's one example. There's many

0:02:35.440 --> 0:02:38.840
<v Speaker 1>examples like that. We can move shift load between the

0:02:38.880 --> 0:02:42.040
<v Speaker 1>weekend during the day. You can do dynamic pricing, so

0:02:42.080 --> 0:02:45.799
<v Speaker 1>you incentivized consumers to spend the right time and right energy.

0:02:45.960 --> 0:02:49.679
<v Speaker 3>Is your software necessary because the grids in many parts

0:02:49.680 --> 0:02:51.639
<v Speaker 3>of the United States are not sufficient.

0:02:52.400 --> 0:02:55.160
<v Speaker 1>So for two decades we did not have any increase

0:02:55.200 --> 0:02:57.280
<v Speaker 1>in load and demand in the US.

0:02:57.560 --> 0:02:58.920
<v Speaker 3>And now we found AI.

0:02:59.160 --> 0:03:02.880
<v Speaker 1>Not just AI with more manufacturing, more evise, we move

0:03:02.919 --> 0:03:04.960
<v Speaker 1>from gas to electricity and so on.

0:03:05.200 --> 0:03:07.359
<v Speaker 3>What was moving from gas to electricity the right move

0:03:07.440 --> 0:03:08.440
<v Speaker 3>in hindsight.

0:03:08.320 --> 0:03:12.360
<v Speaker 1>Yes, houses barn less if you use electricity, it's a

0:03:12.480 --> 0:03:16.239
<v Speaker 1>fundamental it's a safety thing, it's easier, easier to transport.

0:03:16.440 --> 0:03:19.320
<v Speaker 1>There's a lot of advantages. But we do need to

0:03:19.400 --> 0:03:20.160
<v Speaker 1>update our agreed.

0:03:20.280 --> 0:03:26.839
<v Speaker 3>But does it financially make sense? It's consumers.

0:03:27.000 --> 0:03:30.920
<v Speaker 1>Gas parces go up and down. An electricity form solar

0:03:31.240 --> 0:03:33.600
<v Speaker 1>is actually really cheap when the sun is up. If

0:03:33.600 --> 0:03:35.920
<v Speaker 1>you put the buttery, you store it for night. You

0:03:35.960 --> 0:03:39.120
<v Speaker 1>can actually reduce electricity prices using these technologies.

0:03:39.760 --> 0:03:42.720
<v Speaker 2>You know what's interesting is I mean Octopus has said

0:03:42.760 --> 0:03:45.360
<v Speaker 2>that you guys help lower bills when renewable surge, but

0:03:45.440 --> 0:03:48.040
<v Speaker 2>energy prices are still high for many households. Just talk

0:03:48.120 --> 0:03:51.080
<v Speaker 2>to my husband's like, why is it so high? Why

0:03:51.080 --> 0:03:53.960
<v Speaker 2>should consumers believe that this software benefits them and not

0:03:54.000 --> 0:03:55.040
<v Speaker 2>just your bottom line?

0:03:55.760 --> 0:03:59.400
<v Speaker 1>Because unrelated to cracking, the entire industry now need to

0:03:59.560 --> 0:04:04.000
<v Speaker 1>invest in infrastructure, adding more capacity and improve the grid.

0:04:04.280 --> 0:04:06.720
<v Speaker 1>That is going to cost a lot of money. Any

0:04:06.800 --> 0:04:10.480
<v Speaker 1>usage of technology to optimize that will reduce that investment

0:04:10.720 --> 0:04:13.400
<v Speaker 1>because we reduce the peaks and part of that saving

0:04:13.520 --> 0:04:15.200
<v Speaker 1>can go to every household.

0:04:15.480 --> 0:04:17.839
<v Speaker 2>Is there a point though, where the grids are built

0:04:17.839 --> 0:04:19.640
<v Speaker 2>I mean, we've been talking about this and how much

0:04:19.680 --> 0:04:22.279
<v Speaker 2>they're maxed out, and now we've got all of the

0:04:22.320 --> 0:04:25.280
<v Speaker 2>AI demand kind of starting to be factored in. But

0:04:25.360 --> 0:04:27.560
<v Speaker 2>is there a point where the grid is built out

0:04:27.600 --> 0:04:31.200
<v Speaker 2>and we don't need a software platform because we don't

0:04:31.240 --> 0:04:32.800
<v Speaker 2>have peaks or we have enough.

0:04:33.040 --> 0:04:35.120
<v Speaker 1>Even when the grid is perfect, we still need to

0:04:35.160 --> 0:04:38.600
<v Speaker 1>choose which energy source do we use. The sun happens

0:04:38.600 --> 0:04:41.159
<v Speaker 1>to be free, but it's not always there. If we

0:04:41.200 --> 0:04:44.000
<v Speaker 1>can shift the usage and pick the right moments, we

0:04:44.040 --> 0:04:44.839
<v Speaker 1>can reduce costs.

0:04:44.839 --> 0:04:46.760
<v Speaker 3>You've talked a lot about solar, but wind is also

0:04:46.760 --> 0:04:49.719
<v Speaker 3>of interest to us, not just because of what's happening

0:04:50.160 --> 0:04:52.960
<v Speaker 3>offshore of the United States or what's not happening offshore

0:04:52.960 --> 0:04:55.440
<v Speaker 3>of the United States right now. Is this administration making

0:04:55.480 --> 0:04:58.320
<v Speaker 3>a mistake canceling wind power projects?

0:04:58.720 --> 0:05:01.200
<v Speaker 1>Look, some countries believe it's a really good investment for

0:05:01.240 --> 0:05:03.440
<v Speaker 1>the future. The truth is you need to mix. You

0:05:03.480 --> 0:05:06.360
<v Speaker 1>need variety. The ideal mix is a bit of everything

0:05:06.480 --> 0:05:08.560
<v Speaker 1>versus choosing one over the other.

0:05:09.160 --> 0:05:11.440
<v Speaker 3>So you think the US should have wind power, I.

0:05:11.440 --> 0:05:13.400
<v Speaker 1>Think we need to have a mix of everything versus

0:05:13.440 --> 0:05:16.960
<v Speaker 1>just pick one or favorite and price goes into account.

0:05:17.560 --> 0:05:21.039
<v Speaker 1>Investing in you azz, for example, there's a five year weight.

0:05:21.279 --> 0:05:23.600
<v Speaker 1>There's a line to get a new generator, a new turbine,

0:05:23.800 --> 0:05:24.760
<v Speaker 1>So we have to have a mix.

0:05:25.279 --> 0:05:27.120
<v Speaker 2>We are talking with a mirror or he is chief

0:05:27.120 --> 0:05:30.440
<v Speaker 2>executive officer of Kracking Technology is joining us here in studio.

0:05:31.040 --> 0:05:34.240
<v Speaker 2>There let's talk about the spin off and why it's happening.

0:05:34.320 --> 0:05:37.480
<v Speaker 2>Critics are saying that spinning this off is less about

0:05:37.520 --> 0:05:40.760
<v Speaker 2>strategy and more about extracting value for investors. So how

0:05:40.760 --> 0:05:43.719
<v Speaker 2>do you respond to this view a mirror that this

0:05:43.880 --> 0:05:48.000
<v Speaker 2>is a financial engineering play rather than an innovation story.

0:05:48.279 --> 0:05:52.000
<v Speaker 1>Yeah, Kracken was born inside an energy company. Very few

0:05:52.000 --> 0:05:55.440
<v Speaker 1>successful tech companies were born inside an energy company. It's

0:05:55.440 --> 0:05:57.920
<v Speaker 1>such actually quite rare. It made us who we are,

0:05:58.480 --> 0:06:01.880
<v Speaker 1>improved our technology and knowledge of the space tremendously. But

0:06:02.120 --> 0:06:04.680
<v Speaker 1>we would like to work with other energy companies who

0:06:04.680 --> 0:06:07.599
<v Speaker 1>may compete with our parent company. We'd like to invest

0:06:07.640 --> 0:06:11.000
<v Speaker 1>in other markets that our parent company may not play in.

0:06:11.400 --> 0:06:14.920
<v Speaker 1>So we cannot grow and innovate and service the market

0:06:15.160 --> 0:06:17.480
<v Speaker 1>when we're limited to a certain parent company.

0:06:17.520 --> 0:06:19.280
<v Speaker 2>So you're saying that by going out on your own,

0:06:19.320 --> 0:06:22.120
<v Speaker 2>you're able to access a lot more companies. What does

0:06:22.120 --> 0:06:25.679
<v Speaker 2>that mean dynamically in terms of how big your company

0:06:25.760 --> 0:06:27.480
<v Speaker 2>could be? I mean Sky News reported that you guys

0:06:27.520 --> 0:06:29.320
<v Speaker 2>could be worth as much as fourteen billion. We have

0:06:29.400 --> 0:06:30.359
<v Speaker 2>heard ten billion.

0:06:32.320 --> 0:06:34.359
<v Speaker 1>I've heard the rumors. I have no clue what's the number.

0:06:34.440 --> 0:06:36.880
<v Speaker 2>But you understand the business and you understand that by

0:06:36.880 --> 0:06:39.320
<v Speaker 2>spinning off what you might be able to access. So

0:06:39.320 --> 0:06:42.640
<v Speaker 2>what does it mean in terms of valuation or is

0:06:42.680 --> 0:06:45.280
<v Speaker 2>this all hype in terms of do those numbers make

0:06:45.320 --> 0:06:46.120
<v Speaker 2>you nervous?

0:06:46.960 --> 0:06:49.440
<v Speaker 1>First of all, expectations should make you nervous. Our job

0:06:49.520 --> 0:06:51.320
<v Speaker 1>is to be with a great business and hopefully meet

0:06:51.360 --> 0:06:54.680
<v Speaker 1>each and every expectation down the road. But by splitting

0:06:54.720 --> 0:06:57.919
<v Speaker 1>the two companies, we can attract capital and investors that

0:06:57.960 --> 0:07:02.520
<v Speaker 1>are experts in software, not just in energy experts at

0:07:02.600 --> 0:07:06.720
<v Speaker 1>leaf stage software companies. Five hundred million dos ARL is

0:07:06.760 --> 0:07:09.680
<v Speaker 1>not your typical startup. This is scale, so it would

0:07:09.680 --> 0:07:12.240
<v Speaker 1>definitely allow us to attruct the right capital structure and

0:07:12.280 --> 0:07:13.559
<v Speaker 1>the right investors over time.

0:07:14.160 --> 0:07:17.880
<v Speaker 3>Some of the mag seven are actually eyeing energy, Amazon, Google,

0:07:17.960 --> 0:07:22.440
<v Speaker 3>Microsoft looking at the energy space, especially AI driven grid management.

0:07:23.840 --> 0:07:26.520
<v Speaker 3>Why should utilities bet on you rather than going with

0:07:26.720 --> 0:07:27.520
<v Speaker 3>a larger player.

0:07:28.240 --> 0:07:31.040
<v Speaker 1>So kracking is unique in that it does only one thing.

0:07:31.320 --> 0:07:35.360
<v Speaker 1>We only do the platform for utilities for energy companies,

0:07:35.640 --> 0:07:38.360
<v Speaker 1>and it's a very wide system end to end. The

0:07:38.400 --> 0:07:40.680
<v Speaker 1>problem is the alternative you can go with Oracid and

0:07:40.760 --> 0:07:43.240
<v Speaker 1>SAP and other companies. You will need to buy a

0:07:43.360 --> 0:07:46.280
<v Speaker 1>dozen to three, four or five all the way to

0:07:46.360 --> 0:07:50.960
<v Speaker 1>fifty systems in order to service for technology stock. It's expensive,

0:07:51.320 --> 0:07:54.280
<v Speaker 1>it's slow, it's not fit for purpose, it's not designed

0:07:54.320 --> 0:07:56.280
<v Speaker 1>for the needs of an energy company. And that's where

0:07:56.280 --> 0:07:56.800
<v Speaker 1>we're coming in.

0:07:56.920 --> 0:07:58.000
<v Speaker 2>So when does this all happen?

0:07:58.760 --> 0:08:02.360
<v Speaker 1>So we've been running independently operationally for the last eighteen months,

0:08:02.400 --> 0:08:06.280
<v Speaker 1>two years. We're now splitting physically the two structures the

0:08:06.680 --> 0:08:09.280
<v Speaker 1>cup table, and that is going to end by mid

0:08:09.280 --> 0:08:09.720
<v Speaker 1>next year.

0:08:09.800 --> 0:08:11.760
<v Speaker 2>By mid next year, and are you going to be

0:08:11.760 --> 0:08:12.720
<v Speaker 2>a publicly held.

0:08:12.600 --> 0:08:15.320
<v Speaker 1>Entity or will stay private at that point in time.

0:08:15.400 --> 0:08:18.080
<v Speaker 1>Obviously it opens options down the road, but right now,

0:08:18.080 --> 0:08:19.360
<v Speaker 1>the first step is split the two.

0:08:21.440 --> 0:08:23.640
<v Speaker 2>What's a risk to the business? What's the thing that

0:08:23.720 --> 0:08:26.280
<v Speaker 2>kind of worries usually look at the outlook? What is

0:08:26.320 --> 0:08:28.120
<v Speaker 2>it that's the thing that I hate to say keeps

0:08:28.120 --> 0:08:30.640
<v Speaker 2>you up at night because everybody throws that out there.

0:08:30.280 --> 0:08:35.120
<v Speaker 1>I have three teenagers. Okay, there's more than one. But

0:08:35.559 --> 0:08:38.600
<v Speaker 1>the another one thing is the demand right now to

0:08:38.720 --> 0:08:43.160
<v Speaker 1>modernize our energy infrastructure in every country is spiking in

0:08:43.240 --> 0:08:45.480
<v Speaker 1>each and every country. And our job is how do

0:08:45.520 --> 0:08:48.520
<v Speaker 1>we service as many utilities as we can and make

0:08:48.600 --> 0:08:51.880
<v Speaker 1>sure each and every project is a success. To date,

0:08:51.960 --> 0:08:56.000
<v Speaker 1>all of our migrations. We service seventy million households. All

0:08:56.000 --> 0:08:58.320
<v Speaker 1>of them have been successful. Want to keep that truck

0:08:58.360 --> 0:09:01.080
<v Speaker 1>Recorde while handling more and more dema.

0:09:00.679 --> 0:09:02.880
<v Speaker 2>Just real quickly twenty seconds. Is most of your business

0:09:02.920 --> 0:09:04.599
<v Speaker 2>in the US or is it global.

0:09:04.440 --> 0:09:06.920
<v Speaker 1>Globally all over Europe? Half of the UK is running

0:09:06.920 --> 0:09:09.400
<v Speaker 1>on Krak in Australia, Japan and Germany, France and the

0:09:09.520 --> 0:09:12.199
<v Speaker 1>US national Greg just announced we picked Krakcken to run

0:09:12.240 --> 0:09:12.840
<v Speaker 1>for technology.

0:09:12.880 --> 0:09:15.360
<v Speaker 2>We'll stay in touch, love to hear more as you guys,

0:09:15.400 --> 0:09:19.439
<v Speaker 2>and when you are officially I guess. Amir ord He's

0:09:19.480 --> 0:09:22.640
<v Speaker 2>CEO of Krakin Technology, is joining us in studio