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UK grocery platform invests in autonomous vehicle company

Ocado Group has commercially partnered with Oxbotica to collaborate on hardware and software interfaces for autonomous vehicles, with use cases including “kerb-to-kitchen” robots.

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A range of vehicles will be integrated into the Ocado smart platform
A range of vehicles will be integrated into the Ocado smart platform

Ocado Group is investing £10m in Oxbotica, a UK-based autonomous vehicle software company, to help develop autonomous vehicles for “kerb-to-kitchen” deliveries that will be integrated into its online grocery platform.

 

Oxbotica’s relationship with the online grocer began in 2017, when it conducted a two-week trial with a prototype delivery vehicle for autonomous deliveries in Greenwich, London.

 

Commercial collaboration

 

Since that initial trial, Oxbotica reports that it has made “significant progress” in developing its platform, leading to the announcement of a broader relationship that includes both Ocado’s financial investment and a commercial collaboration agreement.

 

The strategic investment will be a multi-year collaboration, and the ultimate ambition is to enable Ocado’s partners that use the Ocado Smart Platform (OSP) to reduce the costs of last-mile delivery and other logistics operations such as in its customer fulfilment centre (CFC) buildings. Ocado said it expects to see the first prototypes of some early use cases for autonomous vehicles within two years.

 

“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 and service delivery operations, while also giving all end customers the widest range of options and flexibility,” said Alex Harvey, chief of advanced technology at Ocado.

 

Oxbotica’s two core products are Selenium and Caesium. Selenium is an on-vehicle suite of software that brings full autonomy to a vehicle in a way that is agnostic to both hardware and environment.

 

Caesium is a cloud-based autonomy management system that brings fine-grained control, audit, data management and monitoring to autonomous fleets. Oxbotica’s products use an advanced set of AI, machine learning and optimisation technologies to yield a low-power, safe, explainable, quick-to-deploy, modular and completely flexible “universal autonomy” platform.

“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”

Ocado will build teams of engineers within its existing advanced technology division to work with Oxbotica on these diverse use cases. The advanced technology division is independent from the engineering team that develops core OSP software and automation. The initial development work will focus on UK operations, and will then extend to international markets where Ocado’s partners operate.

 

Logistics costs constitute the single-largest line item in the operating cost structure of online grocery. Moving finished orders from CFCs to ‘spokes’ (where they are then cross-docked to delivery vans) represents approximately 1.5 per cent of sales in the UK; the cost of final mile delivery is approximately 10 per cent of sales. Labour represents approximately 50 per cent of these costs.

 

Beyond potential cost savings within its core operations, Ocado reckons there are significant opportunities to improve its partners’ customer proposition by being better able to respond to peak delivery demands, reducing the cost-to-serve of its immediacy proposition, and accelerating the shift to electrically-powered vehicles (thereby improving fleet sustainability and reducing environmental impact).

Ocado reckons there are significant opportunities to improve its partners’ customer proposition by being better able to respond to peak delivery demands, reducing the cost-to-serve of its immediacy proposition

For both regulatory and complexity reasons, Ocado expects that the development of vehicles that operate in low-speed urban areas or in restricted access areas, such as inside its CFC buildings or within its CFC yards, may become a reality sooner than fully-autonomous deliveries to consumers’ homes. However, all aspects of autonomous vehicle development will be within the scope of this collaboration.

 

“This is an excellent opportunity for Oxbotica and Ocado to strengthen our partnership, sharing our vision for the future of autonomy,” added Paul Newman, co-founder and CTO of Oxbotica

 

“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.”

 

Ocado’s investment in Oxbotica was part of Oxbotica’s latest Series B equity funding round. The round was led by BP Ventures, and included other strategic and financial investors in the US and UK, China and Australia. Ocado will also take a seat on Oxbotica’s board.

 

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