Kroger partner Ocado is on the road to robotic grocery delivery with autonomous-vehicle investment – MarketWatch

High-tech supermarket and logistics group Ocado is pushing toward a future where, from warehouse to doorstep, groceries will be handled by robots.

The British group, a grocery delivery rival to online retail giant Amazon AMZN, +0.60% in the U.K. and joined with grocer Kroger KR, -0.22% in the U.S., will invest 10 million ($13.8 million) in a commercial partnership with Oxbotica, an autonomous vehicle software company, the company said on Friday.

Shares in Ocado OCDO, +1.87% climbed near 2% on the day, helping Londons blue-chip FTSE 100 UKX, +0.52% index top 7,000 for the first time in more than a year.

The partnership will involve collaborating on hardware and software interfaces for autonomous vehicles, Ocado said, integrating Oxford, U.K.-based Oxboticas software platform on Ocados vehicles.

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The next steps are for Ocado to fit out its delivery vans and warehouse vehicles with data capture capabilities to help Oxbotica to test its technologies. The vision is to automate the entire grocery delivery process: from vehicles that operate inside and out of Ocado warehouses, to last-mile delivery vehicles and curb-to-kitchen robots.

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 [customer fulfillment center] and service delivery operations, while also giving all end customers the widest range of options and flexibility, said Alex Harvey, Ocados head of advanced technology.

Founded by former Goldman Sachs GS, +1.11% bankers in 2000, Ocados business is built on its roots as a high-tech grocery delivery company and it is a competitive player in the cutthroat British supermarket sector. But one of its key areas for growth is creating custom logistics and warehousing solutions using its proprietary robotics technology.

Read more: Kroger and Ocado bring bots to new high-tech facility as digital competition among grocers heats up

In that vein, it has a partnership with U.S. retail giant Kroger dating back to 2018. Earlier this week, Kroger launched its first Ocado warehouse combining robotics and machine learning for fast fresh food delivery located in Monroe, Ohio, north of Cincinnati.

Ocado said the ultimate ambition of its multiyear collaboration with Oxbotica is to enable partners like Kroger to reduce the costs of both last-mile delivery and logistics operations.

The 10 million investment in Oxbotica came as part of the companys Series B equity funding round, led by the venture arm of energy giant BP BP, -0.18%, which has tested autonomous vehicles using Oxboticas technology at a refinery in Germany. Chinese tech giant Tencent 700, +1.94% and safety equipment group Halma HLMA, +0.16% were among the other investors.

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Kroger partner Ocado is on the road to robotic grocery delivery with autonomous-vehicle investment - MarketWatch