Ocado is acquiring two robotics companies as it looks to expand into areas outside online groceries.
The UK-based grocer and technology company has acquired Kindred Systems and Haddington Dynamics for $262 million and $25 million respectively.
Founded in 2014, Kindred Systems is a robotics company based in San Francisco and Toronto, which designs and supplies piece-picking robots for order fulfilment. The company uses deep reinforcement learning to power the robots’ vision and motion control. It plans to have around 180 robots installed and operating by the end of 2020, with revenues of US$35 million in 2021.
Around half of the firm’s 90 employees with join Ocado’s technology team as engineers while the rest will stay at Kindred to further its growth.
Meanwhile, Haddington Dynamics specialises in design and manufacture through 3D printing of low-cost and lightweight robotic arms.
Part of the rationale for the acquisitions is that Kindred Systems, which works with Gap and American Eagle, will offer Ocado the opportunity to expand into new markets outside of grocery.
Ocado also expects that the £7 million in annual costs per fulfilment centre associated with decant and picking functions can be significantly reduced.
Tim Steiner, CEO of Ocado, said: “We consider the opportunities for robotic manipulation solutions to be significant, both for Ocado Smart Platform clients and across the fast-growing online retail and logistics sectors.
“Ocado has made meaningful progress in developing the machine learning, computer vision and engineering systems required for the robotic picking solutions that are currently in production at our Customer Fulfilment Centre (“CFC”) in Erith. Given the market opportunity we want to accelerate the development of our systems, including improving their speed, accuracy, product range and economics.”
Marin Tchakarov, CEO of Kindred Systems, commented: “We have achieved very strong growth with our retail ecommerce fulfilment customers over the last 3 years, and the unique challenges presented in grocery fulfilment will bring an even richer learning environment, further expanding on both our technology and market solutions set. Benefitting from Ocado’s excellence in research, technology, product development and partnering will give Kindred Systems the opportunity to continue to grow and stay at the forefront of AI and machine learning automation and workforce collaboration.”
Todd Enerson, president of Haddington Dynamics, said: “Our unique approach to highly dextrous robotic arms will provide meaningful benefits to delivering robotic manipulation in complex use cases like grocery. We look forward to joining the team.”