Tyltgo’s same-day delivery platform lets small businesses compete with Amazon

Tyltgo wants to make it easier for restaurants and small businesses to compete with same-day delivery services offered by the likes of Amazon and HelloFresh. The Canadian company, which recently raised CAD $2.3 million (USD $1.8 million) in a seed round, is akin to a white label Uber Eats, providing businesses an on-demand delivery platform under their own branding that connects them to gig economy couriers.

“I think about us as a post-purchase experience company,” co-founder and CEO Jaden Pereira told TechCrunch. “The recipient goes directly onto the merchant’s platform and places orders through them, so it feels like they’re interacting with the brand they purchased from throughout the entire experience. Our messages, notifications, tracking pages and delivery are all customized under the merchant’s brand name, but it’s powered by Tyltgo.”

The necessity of having products delivered during the pandemic’s shelter-in-place orders combined with the massive reach of e-commerce giants like Amazon has created a society that expects same-day deliveries. Tyltgo recognized the exclusionary nature of that reality on smaller businesses with less time and fewer resources, and contrived to remedy the situation with some innovative tech and gig economy couriers.

In July 2018, Pereira, 22, co-founded the company with fellow student and developer Aaron Paul while studying at the University of Waterloo. Pereira originally did deliveries himself as a side hustle, while building up a consumer-facing service on Shopify. In October 2019, Pereira and Paul shifted focus to B2B, identifying the real problem as merchants struggling to offer quality same-day delivery at an affordable price.

From December 2019 to December 2020, Tyltgo’s revenue grew 2000%, says Pereira. The company started 2020 with two staff members and ended with nine, including former head of Uber Eats Canada’s marketplace operations, Joe Rhew, and former director of engineering at Goldman Sachs-acquired fintech company Financeit, Adnan Ali.

Aided by funding from VC firm TI Platform Management, Y Combinator and angel investor Charles Songhurst, Tyltgo projects another 1500% revenue growth for 2021. The company’s goal is to expand its team, develop an API and app-based platform, and add 100 more merchants across Ontario.

Pereira said Tyltgo originally focused on florists, and occasionally pharmacies, but demand from the restaurant industry led to the company’s new target — meal kit deliveries.

Meal kit services that provide the culinarily challenged with perfectly portioned ingredients and cooking instructions were already gaining popularity in the before times. When the pandemic hit, services like HelloFresh and Blue Apron saw even more growth. As restaurants struggled to keep their businesses open, many started to get in on the action, delivering restaurant-quality meals with instructions for heating and serving.

The global meal kit delivery services market is expected to reach almost $20 billion by 2027, with heat-and-eat options taking a large share of that market. Tyltgo is counting on the success of this industry. It has already secured partnerships with restaurants like General Assembly Pizza and Crafty Ramen, as well as with more traditional meal kit delivery services from grocery stores and organic farms.

Pereira said working in the “quasi-perishable space” of flowers and meal kits is both a challenge and a differentiator for the company. Depending on the contents of the delivery, Tyltgo will determine its perishability window and make sure to match that window with a driver. It’s also got an advanced fleet management platform that assigns a number of deliveries to suit the size of a courier’s vehicle.

“In the earlier days, the hardest part was being able to match those perishability windows without causing damage to the products,” said Pereira. “We all know that in logistics, you have to account for traffic, weather conditions, all these other things, but you have an eight hour delivery window to get out 35 deliveries.”

Another challenge is ensuring the top quality service Tyltgo advertises while working in the gig economy. Selecting for reliable couriers has slowed the company down at points, but Tyltgo aims to grow capacity only if it can simultaneously maintain a low error threshold.

“We won’t bring on a merchant if we don’t think we have the capacity to handle their deliveries and meet those expectations,” said Pereira.

Whether or not Tyltgo’s meal kit focus will end up driving scalability in the long run, the platform itself has legs. Pereira’s goal is to see Tyltgo become a part of every post-purchase customer experience for all retail trade categories, and that includes expanding into customer service, branding and transactions on top of delivery.

“The main reason why we’re doing this is because a lot of these smaller, brick-and-mortar retailers don’t have the time and resources to be able to compete with the Amazons of the world,” said Pereira. “We want to be able to put that power in their hands.”

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Gousto, a UK meal-kit service, raises another $41M as business booms under lockdown

Food delivery — be it ready-made restaurant meals, groceries, or anything in between — has seen a huge surge of activity in the last few weeks as people have sheltered in place to slow down the spread of the novel coronavirus. Today, one of the startups that’s built a business specifically in meal-kits in the UK is announcing funding to double down on its growth.

Gousto, a London-based meal-kit service, has closed £33 million ($41 million) in funding, money that it’s going to be using to continue investing in its technology — both in the AI engine that it says customers use to get more personalised recommendations of what to cook and eat, and in the backend tech used to optimise its own logistics and other operations — and in building more capacity to meet rising demand and expanding next-day delivery in the near future (it mainly operates on a three-day turnaround between ordering and delivery currently).

The company said that it’s currently delivering some 4 million meals to 380,000 UK households each month and is on course to cross 400 million meals delivered by 2025. It offers currently a choice of more than 50 recipes each week and gives people the option to tailor what they get, with the whole system running in an automated packing process, working out to average price per meal per person to £2.98 at its cheapest.

The funding — which was being raised before the novel coronavirus hit — is being led by Perwyn, with participation also from BGF Ventures, MMC Ventures and Joe Wicks — a hugely popular YouTube fitness coach who has built a lifestyle brand around healthy eating. This brings the total raised by Gousto to around £130 million ($162 million). It’s not disclosing its valuation with this round. It has 100 employees today and plans to expand that to 700 by 2022.

CTO Shaun Pearce said that Gousto was in high-growth mode before COVID-19, operating on forecasts of growing 70% year-on-year. That number — as with so many other delivery and specifically food-based delivery businesses right now — has spiked upward in recent weeks, not just from paying customers but also for Gousto’s own efforts to do something for the relief efforts, with food businesses like Gousto’s some of the remaining “key” businesses that have been allowed to stay open when others like restaurants have closed.

“We continue to be laser-focused on our vision to become the UK’s most-loved way to eat dinner. This additional investment is not only a validation of our track record, but it is also an endorsement of our strategic vision of the future which is rooted in investing in innovative technology to transform the way we search for, shop for, and cook our food,” said Timo Boldt, CEO and founder, in a statement. “In these challenging times, we want to continue offering people more choice and especially more convenience. We will maintain our close relationships with the government and other charitable partners to ensure those already struggling don’t see their situation worsen.”

In the last several weeks, Pearce said Gousto has also seen big changes in customer behavior from pre-existing customers, with a 28% increase in family boxes. “Those who buy from us want to buy more,” he said. Like some other smaller food delivery companies (and small can be as big as the online grocery Ocado) it’s also no longer accepting new customer sign-ups and is focused just on meeting the demand of pre-existing customers.

Gousto’s has also been trying to do its part in relief operations. It’s been working with the UK’s Department for Environment, Food and Rural Affairs to produce meal kits for vulnerable people, and it has donated some 6,000 meals to The Trussell Trust foodbank network and to the homeless charity, Shelter. It’s also ensuring that when its system is overcrowded that NHS employees get priority access to its ordering platform. (This is in addition to the contactless and other safety procedures that Pearce said that Gousto has put in place to minimise the risk of spreading the virus both to its workers and customers.)

Meal kit services in recent years have taken a beating in recent years, typified perhaps most publicly by Blue Apron, which saw its stock drop drastically after going public in part because of the huge amount of competition (not just from other pure-play meal kit companies but a plethora of others like Amazon that have added on meal kits to other existing business lines such as other grocery delivery).

Pearce said that Gousto’s growth and popularity and flexibility that it offers users by way of the AI engine to craft recipes they might actually want to use sets it apart from current competition, which in the UK includes HelloFresh, Mindful Chef, offerings from most major grocers, and many more.

“We continue to be impressed by Gousto and its dedication to its customers,” said Andrew Wynn, founder and managing partner at Perwyn, in a statement. “The business has adapted quickly to continue providing an essential service to so many. This reaffirms the decision we took far before COVID-19, that we’re investing in the right people and a business set for even greater success.”

 

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