Ocado plans £1bn raise following lockdown delivery boom
Online supermarket Ocado is planning to raise £1bn from investors following a surge in business as a result of lockdown restrictions.
The UK company revealed plans to raise £657m in an equity share placing with institutional and retail investors alongside a loan of £350m.
It said the new capital will provide the “financial flexibility to capitalise on opportunities arising from the significant acceleration in online adoption and grow faster over the medium term”.
While Ocado provides its own delivery service, it has also spent recent years investing in the development of a range of food delivery technology and fulfilment options, partnering with big brands.
Last year the investment in technology was explaned as the reason for a quadrupled, £44.9m loss.
Ocado's food-picking robots
The latest investment will be used to gather new clients via additional warehousing space and the installation of further fulfilment robots.
During the home delivery boom of recent months, Ocado said it has helped Morrisons with additional capacity and in-store fulfilment which allowed it to increase online store pick capacity several-fold.
Internationally, the Ocado Group has helped partners Groupe Casino in France and Sobeys in Canada to launch and roll out their online businesses.
In June, US-based Kroger announced the continued expansion of their partnership with Ocado Group with plans to construct three additional customer fulfilment centres in the US.
The firm said as a result of COVID-19 it anticipates new customers are now more likely to have already shopped online, and this makes them easier to convert to customers.
Founder Tim Steiner said online grocery shopping was at an “inflection point”.
“The current crisis is proving a catalyst for permanent and significant acceleration in channel shift globally which we believe will redraw the landscape for the grocery industry worldwide.
“As we emerge from this crisis Ocado has the opportunity to help our Ocado Solutions partners in the UK, and around the world grow faster, to welcome more partners in new markets, to innovate more and more quickly, and to further strengthen our leadership position.”