Grocery delivery startup Tiggy is a new player in the Canadian quick commerce space, announcing Friday $6.35 million in seed funding to get its dark stores up-and-running to accommodate 15-minute deliveries.
E-commerce sales are a $29 billion market in Canada, but food delivery is still nascent. Eugene Bisovka and Razmik Sukyasov co-founded Vancouver-based Tiggy in July 2021, just about the time that Instacart announced it was beginning food delivery in Quebec, giving the food delivery giant access to all 10 Canadian provinces now.
Many individual grocers offered their own delivery during the global pandemic, in addition to the delivery incumbents Instacart, PC Express, Inabuggy, DoorDash and Uber Eats. Tiggy is taking the approach of offering a faster delivery, with no minimum charge or no extra cost, which Bisovka told TechCrunch differentiates the company from its competitors that have longer delivery times and associated fees.
“What impressed me was that Canada has a $100 billion market and almost no food delivery players,” he added. “That was a big reason we chose this market. You can get groceries from DoorDash or Uber Eats, but it takes one hour for delivery and they charge fees, so it is not clear what the final price will be.”
Employing a dark store model is another differentiator, as the model is one that is “virtually non-existent in Canada,” Bisovka said. He explained that the dark store approach leads to hundreds of additional orders per day in the $25 to $30 range, with a projected contribution margin between 10% and 12%.
The company launched its service in September with over 1,400 SKUs, including pantry staples and fresh fruits and vegetables. It is also encouraging more consumer behavior toward on-demand shopping, for example, if you’re cooking and run out of an item or realize you don’t have it.
Heartland led the seed round and was joined by Global Founders Capital, FJ Labs and Redbox Ventures. With the new capital, Bisovka intends to double the amount of SKUs offered, expand Tiggy’s footprint in Vancouver with two new dark stores — it already has four stores — and enter Toronto with five stores by the end of the year. It also gives the company a solid runway to open 350 fulfillment centers across the country by 2024.
Though Bisovka declined to discuss growth metrics outside of having now employed 150 people in five months, Turner Novak, founder of Banana Capital, and one of the company’s early investors, said Tiggy was growing “at an impressive pace” and is already disrupting incumbents that have 1 million customers.
“It’s been impressive watching them over the past couple of months,” Novak added. “With the dark store model, there is more of an opportunity to stay capital efficient, though harder to launch your own fulfillment. If you can do it, you will have more longevity.