Is Tesco cooling on deal with bankrupt warehouse automation systems firm Attabotics?

Earlier this month, we reported that Attabotics, a Canadian warehouse automation systems specialist, had, within the space of a few days, inked a major agreement with Tesco, and also filed for bankruptcy.

The Tesco deal would see the UK grocery giant tapping the firm’s micro-fulfillment systems to fulfill online grocery orders.

If a first installation was successful, it had committed to installing MFCs in potentially 70 Tesco locations, and making Attabotics the preferred automated MFC solution for customers of Transcend, its fulfillment and automation spin out.

Containers loaded with the Attabotics system were reportedly on their way to England, with the installation of the MFC beginning in the near future.

Tesco did not respond to our request for comment on what happens now given the bankruptcy news.

According to our sources, it has not formally declared the deal dead, perhaps because it is working with the creditors of Attabotics (who have forced an asset sale), to see what - if anything - could be salvaged.

One of the sources told RTIH: "I spoke - under condition of anonymity, with an ex-employee of Attabotics - and he said that the company banked its future on Tesco. Now that Attabotics is done, it's his opinion that the MFCs deal will collapse. I also spoke with a contact at Tesco, and they said roughly the same thing - there was a deal, but no longer."

Another stated their belief that Tesco remains the most likely company to buy Attabotics’ IP, while Amazon and Ocado Group could also be in the running.

Scott Gravelle

Attabotics CEO, Scott Gravelle, recently gave an interview in which he discussed what happened and what comes next.

Speaking to Brittain Ladd, a supply chain consultant and former Amazon executive, Gravelle, who describes himself as “a recovering visionary, taking a long deserved break” in his LinkedIn bio, said: “The hardest day of my life was having to tell 190 people they were losing their jobs. I am so proud of what the team accomplished. I am devastated at what happened.”

He added: “I am devastated that Attabotics customers, suppliers, integration partners, and many other people are being harmed. I never took money out of the company. I don't have millions of dollars. I worked with a great team of people to build a company and I have nothing to show for it. I lost my job too and I don't know what I will do next."

Scott said that he approached Export Development Canada in April, about needing a $20 million bridge loan to fund operations through to March 2026. Scott would receive a grant for an additional $9 million if he could prove the company was funded until 2026.

The EDC agreed to approach the Ontario Teachers'​ Pension Plan, an early backer of Attabotics, about investing again. Scott then stressed to the EDC that he needed the money no later than the end of June.

He was confident that he could raise the money. Attabotics had $60 million in sales in the pipeline with Tesco, Gordon Foods, Modern Beauty Supplies, United States Department of Defense, and The RealReal onboard. The firm had recognised revenues of $37 million in 2025, and was on track to generate $100 million in revenue in 2026.

With two weeks remaining in June, however, the EDC informed Attabotics that the Ontario Teacher's Fund would not invest. With only two weeks to try and find a backer, Scott couldn't raise the capital. The EDC called in a note about this, and took ownership of Attabotics, forcing the company to declare bankruptcy.

The EDC has now assigned a trustee to solicit bids to sell Attabotics’ IP, a process in which Gravelle is not involved.

In a LinkedIn post, Ladd said: “What's shocking is that for $30 million, an investor can acquire the entire company of Attabotics and all its IP of 160 patents and be debt free. The former employees are anxious to return to the company. It was built with $300 million of investment and development. New Road Capital, SoftBank Investment Advisers, Blackstone, etc., should bid.”