From here to there: Fast-growing Trexity lands $5M financing round

trexity

Ottawa-based Trexity has just topped up its tank as it pushes to gain ground in the fast-growing last-mile delivery space.

The four-year-old startup said this week it’s landed a $5-million seed funding round led by Telus Ventures, with participation from New York’s Studio VC, Winnipeg-based commercial real estate firm Shindico, Bold Commerce CEO Jay Myers and other undisclosed Canadian angel investors.

It’s another sign that Trexity has come a long way from co-founder and CEO Alok Ahuja’s kitchen table, where the former Shopify executive hatched the idea for the business back in 2018.

At the time, Ahuja had just left Shopify to become a stay-at-home dad. Meanwhile, his own father was battling cancer, and the Carleton University computer science grad struggled to find time to pick up medication for his dad from the pharmacy and buy groceries for his own growing family. 

What Ahuja needed was a way for those items to come to him. Surveying the retail landscape, he saw mainstreets full of businesses that were actually “micro-warehouses” brimming with merchandise but had no way to get them to consumers who couldn’t shop in person.

The son of entrepreneurial parents, Ahuja soon put his coding skills to use building what’s shaping up to be the capital’s next million-dollar-revenue company.

“I just needed to build a platform that would enable (merchants) to move (goods) faster than they could have ever imagined,” he says. “That’s where this was born.”

A few short years and a commerce-transforming pandemic later, the firm Ahuja launched with business partners Mathieu Bouchard, Mourad Gazale and Darren Schnare is on a roll.

More than 750 merchants in Ottawa, Toronto, Calgary and Winnipeg – including well-known local retailers such as Dominion City Brewing, Happy Goat Coffee and Kettleman’s Bagel Co. – now use Trexity to provide same-day delivery to customers via a network of more than 15,000 drivers, with an average of 250 to 300 drivers making deliveries in each city on a given day.

The new funding will help fuel Trexity’s expansion push into other Canadian markets, including Edmonton, Halifax and Vancouver, over the next few months. Before the end of the year, the firm aims to set up shop in select mid-sized U.S. cities as it tries to carve out in a niche in a crowded space that includes household names like Uber Eats and DoorDash, as well as up-and-coming same-day delivery software startups such as Tyltgo, StoreToDoor, Swyft and another fast-growing Ottawa company, GoFor.

Ahuja says he likes Trexity’s chances.

“There’s a lot of room here, and this won’t be won by one specific player,” he explains.

Telus Ventures vice-president of corporate strategy Mario Mele agrees, saying Trexity offers a “competitive solution” that’s easily adaptable to growing verticals such as fashion and consumer packaged goods.

“Courier and delivery services create a $20-billion market in Canada alone, so there is room for multiple service providers that provide differentiated solutions and work for varying needs of businesses,” he said in an email to OBJ.

The 26-person company doesn’t charge merchants monthly fees or take a commission. Delivery fees, which are included in the purchase price of delivered items, are calculated based on time and distance. 

Trexity then bills retailers for the amount of the fee. Drivers – independent contractors who pay for their own gas and other car-related expenses – receive 70 per cent of the total delivery charge, which typically averages about $12, with the company keeping the rest. 

"For me, it's global domination or nothing. I want it all."

Ahuja says Trexity’s revenues have been growing 25 per cent month over month and are on pace to top $300,000 this quarter. The firm, which has added more than 200 merchants to its stable already in 2022, is projecting full-year revenues of between $1.5 million and $2.2 million.

Chatting with a reporter in Trexity’s new head office at the corner of Bank and Queen streets, the firm’s engaging and energetic boss isn’t shy about sharing his lofty ambitions.

“For me, it’s global domination or nothing,” he says. “I want it all. We can take this as far as we want to take it. There’s nothing that’s really going to stop us.”

His confidence stems from a couple of key factors. 

First, there’s Trexity’s partnership with Shopify, which allows merchants who use the e-commerce giant’s platform to run their storefronts to sign up with Trexity at the click of a mouse. The firm has a similar relationship with Winnipeg-based Bold Commerce, which provides one-click checkout service to Shopify merchants across the country and around the world, paving the way for established retailers to instantly access Trexity’s platform.

“Trexity has a great integration with Shopify and other major point-of-sales solutions, making it easy for small, local businesses to rapidly integrate the solution and provide delivery to customers when they haven’t been able to before,” Mele said.

Then there’s Trexity’s proprietary software. 

Unlike some competitors who pay licensing fees to access delivery-tracking technology, Trexity has built its own system that taps into Google Maps, Mapbox and other services to provide real-time tracking of each order using GPS. The software automatically “bundles” deliveries in the same neighbourhood, helping drivers find the fastest, most efficient routes to their destinations.

Ahuja says nearly 80 per cent of Trexity’s merchants now use the bundling technology, which was introduced last year. 

“When you create these dense pockets of deliveries, it’s very cost-effective,” he explains. “When we launched bundling, it took our company to a whole other level.” 

Trexity’s merchant portal sends real-time order-tracking updates to consumers via email and text. The driver app is synched with GPS to ensure a package’s QR code can’t be scanned to confirm a delivery is complete until the merchandise is within 10 metres of the correct door.

The result, Ahuja says, is a “sticky” platform that merchants almost never abandon – he says the only two customers who’ve dropped the platform did so because they went out of business.

“We’ve gotten very smart around the needs of our merchants and the expectations that they’ve set with their customers,” he says. “Nobody has the tech that we do. Nobody has invested the money and the time that we have to build this from the ground up.”

Far from being satisfied with the company’s rapid ascent, Ahuja is already laying the groundwork for another, larger funding round to fund Trexity’s next phase of growth. 

He says demand for the platform has soared as rising gas prices cause more consumers to leave their cars at home and prompt merchants to ditch their own delivery services in favour of Trexity. And he thinks the recent growth spurt is only the beginning.

“We just continue to find areas where the service is needed,” Ahuja says. “We’re riding an incredible wave right now.”

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