Regina-based same-day delivery startup StoreToDoor has raised $1.25 million CAD in seed funding to fuel its expansion across Canada.
StoreToDoor founder and CEO Scott Love has worked in the food industry for 25 years. After dabbling in Saskatchewan’s tech scene through angel investing and seeing the impact of Amazon and COVID-19 on local retailers, he decided to launch his own same-day delivery solution.
According to Love, StoreToDoor is on pace to generate $5 million in ARR in 2022.
Since rolling out in Saskatchewan in December 2020, StoreToDoor has expanded to serve 25 other markets across Alberta, Saskatchewan, Manitoba, and Ontario. Now, armed with fresh capital, the company plans to move into British Columbia (BC) and other regions as it looks to “reach a national scale in 2022.”
“We pushed really, really hard to get a product out before the end of [2020] because we knew the sense of urgency around COVID and taking advantage of that opportunity,” Love told BetaKit in an interview. “So we launched … in Regina [on] December 27, 2020, and it just kind of took off.”
StoreToDoor’s all-equity seed financing, which closed in late January, was led by Calgary’s Inverted Ventures with participation from Regina-based Lex Capital Corp, Saskatoon’s Golden Opportunities Fund and Startup TNT, and undisclosed angel investors from Western Canada. StoreToDoor claims the round gives it a post-money valuation of $9.25 million, and brings StoreToDoor’s total funding to $1.6 million.
As part of the round, Inverted Ventures COO Craig D’Cruze has joined StoreToDoor’s board of directors, which also features Calgary-based serial tech entrepreneur Wilson Acton, who serves as an advisor.
Headquartered at Regina business incubator Cultivator, StoreToDoor offers a white-label, same-day delivery service to companies in the pharmacy, grocery, and retail verticals through its tech platform and driver network. Although StoreToDoor focuses primarily on small-to-medium-sized businesses (SMBs), the startup’s clients include big retailers as well. StoreToDoor’s platform can be accessed in two ways: through integrations with customers’ existing e-commerce platforms, like Shopify, or directly through a portal.
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After spending most of career owning and operating a swath of different Subway and Starbucks franchises, Love has developed a firsthand knowledge of some of the challenges faced by brick-and-mortar retailers.
From his experience in the food industry, Love said retailers felt like they were being ripped off by big delivery apps, which charge “fee, after fee, after fee.”
While other companies offering same-day delivery typically take a percentage of cart—like UberEats with restaurants and Instacart with groceries—StoreToDoor takes a non-fee-based approach, charging its retailer customers a flat rate per delivery, with adaptable prices based on delivery volume.
During the pandemic, the same-day or last-mile delivery space has exploded. In Canada, the sector features general players like Ottawa-based GoFor Industries, Toronto’s Swyft, and Kitchener-based Tyltgo, as well as more targeted operators like Montréal’s RenoRun, Winnipeg’s Callia, and Vancouver-based Tiggy, which deliver construction materials, flowers, and groceries, respectively.
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Amid an increasingly saturated market, Love believes StoreToDoor is “in a unique spot.” While some companies in this space either provide just the tech or couriers only, StoreToDoor offers both. Within the group of companies that does both, Love sees StoreToDoor’s flat-rate pricing model and white-label approach as differentiators.
“We’re not a third-party marketplace,” said Love. “We’re not taking [retailers’] clients, we’re actually bridging that gap … That’s a really, really big piece of why we’re getting a lot of conversations with these big retailers—it’s because they don’t want to give their clients away to, let’s say, Uber or SkipTheDishes, or somebody like that.”
According to Love, last year, StoreToDoor generated $270,000 in revenue. “We’ve already exceeded that in the first two months of [2022],” said Love. “We’ll probably do about five million this year in [annual recurring revenue].”
In terms of StoreToDoor’s geographic expansion plans, the startup’s main focus currently is on moving into BC, where it sees “big opportunity” in the lower mainland.
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To date, StoreToDoor’s rapid growth has been fuelled by its work with existing big retail customers with multiple locations, which has aided its expansion into new markets.
Sector-wise, Love described pharmacy as a “key focus” for the startup—partly due to the typically small packages involved—adding that StoreToDoor is also seeing “major growth” in the cannabis vertical.
StoreToDoor has 18 full-time employees and a network of approximately 400 delivery drivers. To support its expansion, the startup is looking to add six more team members in the near future in roles ranging from software engineering to customer success.
“I think we can really help some people that are struggling out there retailer-wise,” said Love. “It’s still a very trying time for them. They’ve had two years of ass-kickings, and if there’s any way that somebody can help them and give them a competitive edge against those big e-commerce retailers like Amazon, we’re there to do that.”
Feature image courtesy StoreToDoor.
