Ocado has invested £10m in a self-driving vehicles company to drive its ambition to make autonomous grocery deliveries and develop “kerb-to-kitchen robots” to drop off shopping in homes.
The online grocer, which has previously tested a prototype self-driving truck delivering food and snacks to customers in south-east London, has moved to strike a commercial partnership with Oxford-based Oxbotica, which developed the truck.
Ocado, which will take a seat on Oxbotica’s board, said the technology could be used for “last-mile deliveries and kerb-to-kitchen robots”. The trials in Greenwich, London, in 2017 used a small “CargoPod” that holds eight boxes and required customers to leave their houses to pick up their shopping.
Ocado said the driverless vehicles could also operate inside its fulfilment centre buildings and the yards around them.
“We are excited about the opportunity to work with Oxbotica to develop a wide range of autonomous solutions,” said Alex Harvey, the chief of advanced technology at Ocado. “These solutions truly have the potential to transform both our and our partners’ customer fulfilment centres and service delivery operations while also giving all end customers the widest range of options and flexibility.”
Ocado said there were potentially huge savings to be made by introducing autonomous technology to its operation. The moving of orders within its fulfilment centres costs 1.5% of UK sales and the cost of “final-mile delivery” is about 10% of sales. Labour represents about half of these costs.
Owing to regulatory and complexity reasons, Ocado said the development of vehicles that operate in low-speed urban areas or in restricted-access areas, such as its fulfilment buildings and yards, “may become a reality sooner than fully autonomous deliveries to consumers’ homes”.
As part of the collaboration, Ocado said it would outfit some of its delivery vans and warehouse vehicles with data capture capabilities, such as video cameras and radar, to train and test Oxbotica’s technology.
Ocado, which employs almost 19,000 staff, said the vehicle autonomy programme would not change “current hiring or employment levels within logistics or operations groups”.
Oxbotica was founded in 2014 by two professors, Paul Newman and Ingmar Posner, who had met as research students 11 years earlier, and was subsequently spun out as Oxford University’s robotics institute.
The pair each hold a significant stake in the business, Oxford University is also a shareholder, with Oxbotica initially surviving on research grants before relying on its own revenues once independent.
Newman and Posner are worth a small fortune, on paper at least, adding the latest £34m round of funding with a previous £14m raise in 2018. Alongside Ocado, the latest funding round was led by BP Ventures and includes the Chinese tech giant Tencent.
“This is an excellent opportunity for Oxbotica and Ocado to strengthen our partnership, sharing our vision for the future of autonomy,” Newman said.
Oxbotica is also part of a £12.3m government-backed project called Endeavour, which has deployed a fleet of six self-driving Ford Mondeos that drive a nine-mile round trip of the streets of Oxford.