Ocado is facing a potential £20m loss after a major UK farming start-up backed by the company fell into administration. The logistics group, led by Tim Steiner, had been a major backer of Jones Food, which was hailed as a game-changer for Britain's farming industry, allowing vegetables to be picked next door to delivery depots.
But the farming venture fell into administration this year after Ocado signalled that it was not willing to provide more cash to the start-up and it failed to find a new backer. Ocado risks losing £21.7m on the collapse, filings for Jones Food's administration now suggest, and the company is unlikely to recoup the millions of pounds it pumped into the start-up.
This includes £8.6m of initial investment in 2019 and a £3.7m cash injection in 2023.
Administrators for the start-up said funds from the sale of Jones's assets would go on paying off expenses and creditors. The collapse of Jones Food is a fresh setback for Ocado, which has been battling to stem losses and churn out more cash in the face of higher debt costs.
Ocado has been making heavy cuts in its research team in an attempt to help it shift into profit and was hit by a tripling of its debt interest costs after it refinanced looming bonds last month.
Jones Food was among a series of investments made by Ocado into tech start-ups in an attempt to shrug off its image as an online grocer.
Read more at The Telegraph