Ocado investment paves way for 'kerb-to-kitchen' robot food deliveries

Ocado, the online grocery retailer turned tech giant, is to invest £10 million in driverless vehicle start-up Oxbotica and look at the potential for automated deliveries into customers’ homes.

The firm said it will look at the use of Oxbotica’s autonomous vehicle software for operations at its warehouse as well as “last-mile deliveries and kerb-to-kitchen robots”.

The cash injection comes as part of a £34m Series B funding round, led by BP Ventures, in the Oxford-based firm.

Ocado, whose retail delivery arm has a joint venture with Marks & Spencer, said the partnership will see the two businesses collaborate to integrate Oxbotica’s autonomy software platform into a variety of vehicles that can be used by the FTSE-100 business.

Ocado, the online grocery retailer that has a joint venture with Marks & Spencer, has transformed itself into a retail technology giant.

It will build teams of engineers within its existing advanced technology division to work with Oxbotica on potential ways of using its software.

The move towards greater automation will not affect its current workforce or hiring plans.

Ocado said a move towards increased automation could reduce its logistics costs and also make it better able to respond to peak delivery demands. It currently predicts that the development of vehicles to operate within restricted areas, such as at distribution sites, may “become a reality sooner than fully-autonomous deliveries to consumers’ homes”.

However, it said this will still be looked at within the scope of the partnership, with the first prototypes for the use of automated vehicles expected “within two years”.

The initial development work will focus on UK operations and will then extend to international markets where partners operate, Ocado told investors.

Analysts at brokerage Shore Capital noted: “Such an investment is interesting as it represents a divergence of sorts by Ocado away from its seemingly core purpose, which is to help facilitate largely offline supermarkets to enter the online grocery channel.

“As such the Oxbotica involvement sits alongside a number of investments by Ocado Group that seemingly seek to deepen its proprietary technology credentials, which in time may prove to be an astute move when it comes to actual financial output of the group, which for approaching 20 years now has absorbed an immense

amount of capital for meagre nay derisory returns of that investment – capital return differing from shareholder return, of course.”

“It will remain several years before Ocado reports notable positive post-tax profits whilst it still expends enormous sums on capital expenditure and capitalises considerable costs.”

Alex Harvey, chief of advanced technology at Ocado, said: “We are excited about the opportunity to work with Oxbotica to develop a wide range of autonomous solutions that truly have the potential to transform both our and our partners’ CFC (customer fulfilment centres) and service delivery operations, while also giving all end customers the widest range of options and flexibility.”

Paul Newman, co-founder and chief technology officer of Oxbotica, added: “This is an excellent opportunity for Oxbotica and Ocado to strengthen our partnership, sharing our vision for the future of autonomy.

“By combining both companies’ cutting-edge knowledge and resources, we hope to bring our universal autonomy vision to life and continue to solve some of the world’s most complex autonomy challenges.”

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