No one, it seemed, believed that online supermarket Ocado would ever survive or thrive. True believer and co-founder Tim Steiner did – and he has been vindicated. Jane Lewis reports.
“Ocado begins with an ‘o’, ends with an ‘o’ and is worth zero,” quipped one London-based analyst shortly after the company floated in 2010. Founded by three former Goldman traders a decade earlier, the outfit had broken new ground as Britain’s first online delivery grocer.
Yet it was written off for years as “a middle-class indulgence” by cynics in the City, later equally quick to scoff at tales of its miraculous reinvention as a technology company. By the summer of 2017, notes Bloomberg, Ocado was the most shorted stock in Europe.
Vindication at last for co-founder Tim Steiner – the only one of the original three still in place. In an otherwise dismal year for stockmarkets, Ocado nearly doubled its value to £5.2bn – propelling itself into the FTSE 100 on the back of a couple of deals with international supermarkets. The doubters might well ask, “how the hell did that happen?”, says The Times.
“If only they’d listened to Steiner droning on” about how Ocado wasn’t just “a van outfit”, but actually “the owner of the wizziest food-delivery tech around” – whose services as an “Amazon slayer” are now in demand globally by grocery chains taking defensive action.
Steiner, 49, “has always divided opinion”, says The Sunday Times. “But his belief in his creation has never wavered.” Steiner, whose 3.4% stake is worth £179m, has now taken his place among an “elite group of founders” who “have created blue-chip companies from scratch”. But “if belated victory over his tormentors tastes sweet, he isn’t showing it” – merely observing that Ocado’s triumph is “an 18-year overnight success”.
Steiner spent eight years as a bond trader in London, Hong Kong and New York, “but consumer interests run in his family”, says the Financial Times: his great-grandfather founded Steiner Leisure, the now Nasdaq-traded spa group; another grandfather gained royal warrants as hairdresser to Queen Mary and cosmetician to the Queen Mother.
Raised in north London, Steiner was educated at Haberdashers’ Aske’s school in Hertfordshire and studied economics at Manchester before landing a job with Goldman in 1992.
When Steiner and two Goldman colleagues – Jonathan Faiman and Jason Gissing – quit to found Ocado forerunner Last Mile Solutions in 2000, “their timing was lucky”, says The Sunday Times. “Amid the optimism of the first dotcom bubble”, Charlie Mayfield of the John Lewis partnership negotiated a seed investment in return for a 40% stake – and Ocado got its first break as the online distribution arm of the partnership’s supermarket.
With hindsight, the trio later admitted they were “arrogant and naïve” about the supermarket business. But as Gissing later observed, Steiner’s “evangelism and self-belief” were essential when taking on powerful household names.
In recent years, Steiner has sometimes hit the headlines for the wrong reasons, says The Observer. In addition to a £116m divorce battle, he attended the notorious Presidents Club – the charity forced to close last year after “deplorable” revelations about a men-only fundraising dinner where hired hostesses were allegedly groped. And questions have been asked about offshore trusts and companies.
Some in the City remain sceptical about whether Ocado can keep up the pace of its “transformative” deals, says The Sunday Times. But even Steiner’s most trenchant critics give him “total and utter respect” for “single-handedly” turning a “failed” retailer into a FTSE 100 company, in the words of Shore Capital’s Clive Black. As Black concludes: “If you can’t be good, be lucky”.