Ocado acquires Kindred Systems and Haddington Dynamics to enhance its robotic manipulation capabilities

When combined with Ocado’s existing expertise and technologies in robotic manipulation, Kindred Systems and Haddington Dynamics are expected to accelerate the commercialisation of robotic picking and other automation tasks for OSP clients.

LONDON: Ocado Group plc announced proposed acquisition of Kindred Systems Inc. for consideration of approximately US$262 million; and Haddington Dynamics Inc. for approximately US$25 million, a company announcement said.

Tim Steiner, CEO of Ocado, commented: “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.

“I am delighted to be welcoming Kindred Systems and Haddington Dynamics to the Ocado group, as we believe they have the capabilities to allow us to accelerate delivery, innovate more, and grow faster. I am also excited by the opportunity to enter new markets for robotic solutions outside of grocery that is demonstrated by Kindred Systems’ robust growth, with existing customers such as Gap and American Eagle across the general merchandise and logistics sectors.”

Marin Tchakarov, CEO of Kindred Systems, commented: “I am proud to see Kindred Systems and our brilliant team recognised by Ocado as a leader in robotic pick and place manipulation, and we are extremely excited to realise our next chapter as part of them.

“We have achieved very strong growth with our retail e-commerce 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, commented: “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.”

Kindred Systems is a robotic solutions company based in San Francisco and Toronto that designs, supplies and services sophisticated piece-picking robots for e-commerce and order fulfilment.

Founded in 2014, Kindred Systems was one of the first companies to successfully use deep reinforcement learning (a form of artificial intelligence that improves the learning process of handling disparate items like those in grocery) to develop piece-picking robots with AI-powered vision and motion control. Once a robot is installed, Kindred Systems provides teleoperation remote assistance and engineering services to ensure that the robot continues to operate at a high pick rate with limited downtime.

Kindred Systems has around 90 employees, approximately half of whom are engineers who will join Ocado’s existing technology team, with the remainder of employees continuing to drive Kindred Systems’ growth. Kindred Systems is expected to have approximately 180 robots installed and operating by the end of 2020 across its growing client base, and is expected to generate revenues of over US$35 million in the calendar year 2021, the vast majority of which are recurring.

Haddington Dynamics is an advanced research and development company based in Las Vegas that specialises in the design and manufacture of low-cost, lightweight, highly dexterous, robotic arms. Haddington Dynamics’ arm design and technology allows for the arm to be manufactured at a relatively low cost via 3D printing, with a corresponding positive impact on the financial returns of robot deployment. Current clients include NASA and DuPont.

When combined with Ocado’s existing expertise and technologies in robotic manipulation, Kindred Systems and Haddington Dynamics are expected to accelerate the commercialisation of robotic picking and other automation tasks for OSP clients.

The solution for grocery picking will fit seamlessly into our current CFC and Micro Fulfilment Centre (MFC) footprints and will be fully-integrated into OSP.

Given the significant costs associated with the decant and picking functions within CFCs – up to £7 million of annual cost per CFC – automation solutions have attractive economic potential for both Ocado and our partners. Further uses within CFCs (such as de-palletising and de-trashing) and in other applications (such as food handling and vertical farming) may also be possible over the medium term.

Kindred Systems’ existing customers are focused on robotic picking within the general merchandise and logistics sectors, and represent a large and fast-growing new segment for Ocado Solutions. Ocado will support Kindred Systems’ existing sales and product development capabilities in order to expand its customer base and robot deployment within both the USA and globally as part of the structural shift towards e-commerce.

The transaction will have no financial impact in the current financial year. Ocado expects full year 2021 revenues to increase as a result of the two acquisitions by approximately £30 million with a small negative impact on EBITDA.

Ocado Group will invest £10 million in Oxbotica Ltd.


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