Ocado to start delivering to homes in the south west of England and south Wales from March of next year.
The online grocer said it will be able to serve 1.5 million households in Bristol, Bath, Cardiff and the surrounding areas.
Ocado said it had purchased a distribution centre near Bristol to carry out the expansion, and that it would be creating an extra 100 jobs.
The firm listed its shares in July, but only after it cut the asking price.
Ocado had hoped to sell the shares for between 200 pence and 275p each, but ultimately had to lower the price to 180p.
Despite this reduction, the shares have subsequently fallen in value, and ended Friday trading at 137.2p.
Last month Ocado reported a 30% rise in quarterly sales.
The company currently delivers in London and the south east of England, the Midlands, the North West, and most of Yorkshire.