Ocado taps investors for £1bn to add firepower

ONLINE supermarket Ocado last night launched a £ 1bn fundraising.

The company said it planned to raise £ 657m through a shares placing, including an offer to small investors, and about £350m by issuing convertible bonds due in 2027.

It said the cash would give it firepower to respond to a boom in demand during the virus crisis.

Internet retailers and supermarkets have seen delivery orders rocket in recent months as lockdown measures have kept people indoors.

Ocado does not have any physical stores but sells groceries through its website and app, using cutting-edge robot warehouses to package and dispatch customer orders. It has gained major success by also licensing its technology to other outlets, including France’s Casino and US giant Kroger.

Last night Ocado boss Tim Steiner, who co-founded the business in 2000 and is worth an estimated £403m, said the online groceries sector was ‘experiencing an inflection point’.

He added: ‘The 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.

‘Ocado’s model is proven. The significant acceleration in online grocery provides us with greater opportunities.’

He said the fundraising would let the company speed up its expansion plans.

It comes just days after Kroger announced it was planning to develop three more Ocado warehouses. Yesterday, Ocado shares rose 0.3pc, or 7p, to 2079p.