A startup that made robot chefs and attracted millions in investment from Ocado has been sold in a pre-pack administration for just £350,000.
Karakuri, founded by Barney Wragg in 2018, developed a robotic arm for serving noodles and an automatic fryer, which had undergone trials with Nando’s.
The start-up raised £13m from food delivery company Ocado and Brent Hoberman’s First Minute Capital. The taxpayer-backed Future Fund, a start-up rescue vehicle launched by Rishi Sunak during the pandemic, also provided investment.
However, the firm collapsed into administration in June, with 30 staff losing jobs, after it failed to raise external funding to expand its kitchen automation business, burning through £3.3m in 2022 as venture investment dried up.
Administration documents showed how, months earlier, investors had tried recapitalising the business. The funding proposal required the Future Fund to agree to alter the price at which loan notes it provided to the business would convert into equity.
However, the documents claim the fund “declined to support” changing its loan terms. The deal ultimately fell apart.
A British Business Bank spokesman said: “We do not comment on individual cases given commercial sensitivities, however the bank will always aim to secure value for money and aim to protect the taxpayers’ interests.”
RSM was hired to advise on a possible administration. A pre-pack deal was agreed with Henny Penny, a supplier to KFC and Wendy’s, in July. Under the deal, prototypes from Karakuri have been sold to the US kitchen equipment company.
Damian Webb, a partner at RSM, said: “Karakuri explored all available options to secure the available funding to take it to profitability. Regrettably, the current economic landscape undermined these efforts.”
It comes as once-soaring valuations for food technology businesses have crumpled. Zume, a US startup that built a robotic pizza oven, collapsed earlier this year after raising $500m (£393m) from investors.
It can also be disclosed that Satis AI, a kitchen technology company that raised money from UK venture fund MMC, has filed notice of plans to appoint administrators, kicking off a ten-day period for the company to seek new financing or sell the business before administrators take charge.
Satis.AI describes itself as offering an “AI-vision kitchen brain” which monitors dishes in restaurants as they are put together through cameras installed above chefs’ workstations. If a chef forgets to include an ingredient or an item in a meal destined for delivery, for instance, the system warns them before the food is sent out or served to customers.
Its founder, Mo Khodadadi, previously said: “This camera understands humans, it understands food items, it also understands packaging. If [the chef] leaves something missing, it is going to raise it to him and mitigate that.”
Mr Khodadadi declined to comment when approached about the notice to appoint administrators.