On-demand delivery platform Tyltgo raises $2.3 million to accelerate Ontario expansion

TyltGO

Kitchener-based same-day delivery software startup Tyltgo has raised $2.3 million CAD ($1.8 million USD) in seed financing, as the company looks to double the size of its team and fuel its growth in the Ontario market.

The round, which Tyltgo called “oversubscribed,” was led by San Francisco-based venture capital firm TI Platform Management, Y Combinator, and angel investor Charles Songhurst. As part of the round, Khaled Hussein, partner at TI Platform Management, will join Tyltgo’s board as the startup’s chairman.

Tyltgo touts its white-label offering as “Amazon-style same-day delivery.”

Tyltgo touts its white-label offering as “Amazon-style same-day delivery” provided to small businesses under their own brand name “at a fraction of the cost.” The company’s platform connects couriers to retail clients that range from meal kit providers, florists, and pharmacies.

Tyltgo plans to use the fresh funding to build out its team and develop its API and app-based platform. The startup’s team grew from three people last July to nine people currently, and plans to add nine more employees over the next two quarters.

“Once we have these people, we’re going to be together, working on improving our products, growing our product suite, expanding across Ontario, so that we can start helping more retailers,” Jaden Pereira, Tyltgo’s co-founder and CEO, told BetaKit.

In the two-and-half years since its inception, Tyltgo has scaled up to serve big firms like Bloomex, Canada’s largest flower delivery service, and growing startups like General Assembly, “the world’s first pizza subscription service.” The company currently offers integrations with platforms like Shopify and Squarespace. The new funding represents Tyltgo’s first round of external financing.

Pereira, who is 22, co-founded Tyltgo in August 2018 while he was studying biology at the University of Waterloo and spending his summers working in shipping and receiving. “In school, I said, ‘instead of getting a part-time job, I’m going to start my own business and try to make some money.’”

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Pereira began by connecting with some local merchants and offering delivery services to university students. As Pereira’s business grew, he noticed an opportunity.

“I realized that there was a big gap in the market for these merchants, and that we were experiencing a lot more growth on the merchant-facing side than the consumer-facing side,” said Pereira. As a result, in October 2019, Tyltgo pivoted to providing white-label, same-day delivery for retailers “by connecting them with gig economy drivers through technology.”

During COVID-19, the demand for same-day delivery has increased significantly. In 2020, Tyltgo claims its revenue grew by 2,000 percent, driven by a significant increase in order growth. This year, Tyltgo forecasts revenue growth of 1,500 percent.

Last year, Tyltgo was one of 11 Canadian startups that participated in Y Combinator’s Summer 2020 Demo Day. In September, the company refined its focus from “the quasi-personal space as a whole” to the home solution space.

The startup’s executive team currently includes former head of marketplace operations at Uber Eats Canada and head of Uber Rides Korea, Joe Rhew, as co-founder and COO, and former director of engineering at Financeit, Adnan Ali, as head of engineering.

Tyltgo wants to provide “the best post-purchase experience for all retail trade categories and transactions.” To achieve this, the firm’s software aims to make customers feel as though they are interacting directly with the companies it serves, by offering features like custom messaging, branded tracking pages, and personalized feedback responses.

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“It’s not just the delivery side that we’re offering value in terms of cost savings,” said Pereira. “It’s the experience where we’re really providing the value.”

Pereira expects the demand for same-day delivery to drop slightly post-pandemic, but thinks the overall trend is “here to stay.”

“These are uncertain times for retailers, but Tyltgo helps these merchants connect with their customers in an innovative way that will continue to serve them after lockdown restrictions lift,” said Pereira.

The CEO said that during the pandemic, customers and businesses have become more accustomed to same-day delivery and its benefits.

“This was a trend that was already happening in the big picture, and [COVID-19] expedited that trend, so we think it’s going to continue to grow,” said Pereira, who added that for many businesses that were thinking about implementing same-day delivery pre-pandemic, COVID-19 served as the necessary push to make that jump.

The startup hopes to add 100 new retailers on its platform by the end of this year, with a particular focus on the growing meal kit vertical. “Right now we cover the majority of southwestern Ontario, and this is where this service is needed the most,” said Pereira.

Tyltgo also has its eye on Montreal and Vancouver, and ultimately wants to expand across Canada.

With files from Isabelle Kirkwood.

Photo of Tyltgo co-founders Jaden Periera, CEO, and Aaron Paul, CTO, courtesy of Tyltgo.

Josh Scott

Josh Scott

Josh Scott is a BetaKit staff writer who loves to tell Canadian business and tech stories. His coverage is more complete than his moustache.