Ocado is seeking to raise more than £1bn to capitalise on the boom in online grocery shopping brought about by coronavirus.

The company last night laid out plans to raise £657m through placing of £650m ordinary shares and a £7m retail offer. It also announced it is launching an offering of £350m through a convertible bond issue.

The intended £1bn capital raise will give the Ocado Group the “financial flexibility to capitalise on opportunities arising from the significant acceleration in online adoption and grow faster over the medium term” it said.

The capital raise comes in the context of huge growth in online grocery. Online shopping now accounts for 11.5% of all grocery sales in the UK, according to Kantar. The channel has gained more ground and attracted more new shoppers in the first half of 2020 than it has in the previous five years. Nielsen puts the online share of the grocery market even higher, at 13%.

Online’s share of sales has similarly been boosted around the world. According to Ocado there is now a “new baseline for online penetration” and “expectations for a sustainable step up in growth from this new baseline”. This rapid growth will expand Ocado’s addressable market with “a fee opportunity for Ocado Group of £3.5bn to £26.3bn” it said.

Ocado Group CEO Tim Steiner, named the most powerful person in online grocery in The Grocer’s 2020 Online Power List this month, said the channel was at an “inflection point”.

“The current crisis is proving a catalyst for permanent and significant acceleration in channel shift globally which we believe will redraw the landscape for the grocery industry worldwide. The significant acceleration in online grocery provides us with greater opportunities than ever before,” he said.

“This capital raise gives Ocado Group the opportunity to accelerate our role in creating sustainable change in the industry, allowing us the flexibility to move at increased pace and capitalise on the full opportunity set over the medium term,” Steiner added.

The money raised will support Ocado’s existing Ocado Solutions partners manage the surge in demand and fund the automation efforts of new partners worldwide. The group currently has nine partners – including its Ocado Retail arm, a joint venture with Marks & Spencer. This year has marked delivery of Ocado’s first international CFCs to Groupe Casino in France and Sobeys in Canada with scores more planned.

The cash injection will also be invested in “innovation and at a faster pace” and put the business in a “powerful position to fulfil its medium‐term growth aspirations”.