Ocado-backed startup's £13m journey ends in £350K sale

Robotics startup, Karakuri, that had previously attracted millions in investment from Ocado and had reached a funding high of £13 million, has been sold for just £350,000.

Founded in 2018 by Barney Wragg, Karakuri developed a robotic chef for serving noodles and an automatic fryer, which had even undergone successful trials with the restaurant chain Nando’s.

The startup garnered £13 million in funding from Ocado, the food delivery company, Brent Hoberman’s First Minute Capital, and the Future Fund, a government-backed initiative introduced by Rishi Sunak during the pandemic to support the growth of UK startups.

Nevertheless, the company experienced a downfall and collapsed into administration in June. As a result, 30 employees were left jobless. The collapse occurred because the company couldn't secure external funding to grow its kitchen automation business. In 2022, it expended £3.3 million as venture investment became scarce. Prior to filing for administration, the company had veen set for expansion.

According to The Telegraph, accountancy firm RSM was hired to advise on a possible administration, but a deal fell apart after investors had tried recapitalising the business.

Company filings show that a pre-packaged sale of some assets to Henny Penny, a US foodservice equipment company, was agreed on 28 July. The assets included “three prototypes” developed by Karakuri and intellectual property rights. The London-based company developed robotic tools to prepare and serve food, including a robotic arm that served personalised sushi dishes.

It is reported that Barney Wragg, Karakuri’s CEO, still remains majority shareholder, with a 36% stake in the company.

This tragic story follows news that UK tech funding is decreasing year-on-year. According to analysis from investment firm Atomico, the data shows that UK tech investment fell by 57% year-over-year, which makes it the sharpest funding decline across the entirety of Europe.