Food delivery enterprise is merging with Vancouver mobile commerce app developer Perk Labs in a move the companies hope will better position them to compete toe-to-toe against industry behemoths like DoorDash and Skip the Dishes.
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Ottawa-based food delivery enterprise Getit Technologies is merging with Vancouver mobile commerce app developer Perk Labs in a move the companies hope will better position them to compete toe-to-toe against industry behemoths like DoorDash and Skip the Dishes.
Perk Labs, which trades on the Canadian Securities Exchange, the U.S.-based OTCQB exchange and the Frankfurt Stock Exchange, closed an agreement to acquire Getit last week in an all-share deal valued at about $4.7 million.
Getit co-founder and CEO Ryan Hardy will take over as chief executive of the combined enterprise, which has two dozen employees. Former Perk Labs CEO Jonathan Hoyles becomes chief legal officer, while Getit co-founder Ben Lacroix takes on the role of chief development officer in charge of sales and partnerships.
Hardy says joining forces with Perk Labs, which specializes in online ordering, payments and loyalty software, will give the combined entity a strong foothold in three different market segments: last-mile delivery, mobile ordering and digital payments.
“There’s not a lot of technologies that consolidate all of these together,” he says. “And what we found is that between our two companies, we can be this kind of three-pillared force.”
It’s the latest iteration of Getit, which was launched in late 2019 as a service to deliver drinks and snacks to fans’ seats at sporting events.
The company soon switched gears as stadiums shut their doors to spectators during the pandemic, pivoting to deliver food and other merchandise. Getit now serves almost 200 local businesses, including Beyond the Pale Brewing, The Grand Pizzeria and Bar and Zak’s Diner.
The firm’s app, called Getit Local, has processed 50,000 deliveries in partnership with local limousine service Responsible Choice. Getit’s base platform is free to join for merchants – who are charged an 18 per cent commission fee that Hardy says is lower than many other third-party delivery apps that charge 30 per cent or more – while consumers pay a flat delivery fee based on distance.
Although the company has carved out a growing local niche in the crowded last-mile delivery space, Hardy says he and Lacroix were looking for a way to generate more revenue by building delivery and payment apps for bigger clients like hotel chains, stadiums and major sports organizations.
Eight months ago, the pair met Ottawa-based boutique investment banker Patrick Power. A former high-ranking executive at Corel and Newbridge Networks who went on to found Nuvo Network Management, Power now serves as chairman of James Edward Capital Corp.
With Power’s help, Hardy and Lacroix connected with Hoyles and his team at Perk Labs.
“After two or three months of chatting, we realized that both companies were fighting in very highly fragmented spaces,” Hardy says. “We’ve really elevated to this upper echelon of (software) features that we didn’t think we were going to get our hands on for (another) year or two.”
Although Perk Labs is a publicly traded entity with a multimillion-dollar valuation, the nine-person Vancouver company has burned through more than $40 million in capital since its inception in 2014 while developing products that have barely made a dent in the market.
In the fiscal year ending last Nov. 30, Perk Labs racked up a net loss of $3.4 million on revenues of just $31,500, compared with a $1.5-million loss on sales of $29,000 the previous year.
Hardy seems unfazed. He says he’s confident that adding Getit’s delivery know-how to Perk Labs’ expanding tech stack will result in a can’t-miss value proposition for customers.
Explaining that many merchants now shell out thousands of dollars a month to subscribe to third-party delivery apps like Skip alongside point-of-sale platforms like Stripe and reservation-booking services such as OpenTable, Hardy says his firm will soon be primed to offer “four to six of these services in one suite of products for a fraction of the cost.”
Hardy contends that Perk Labs probably “focused a little bit too hard on R&D versus selling (products).” However, he says the company is still in a relatively good financial position, with little long-term debt.
“For them, not having delivery as a company, it definitely made it hard for them to compete in this space because delivery is so imperative to local businesses now,” Hardy adds. “We live in an Amazon world.”
But the CEO says he sees perhaps an even bigger upside in creating “custom-branded” apps for clients to provide seat- and ticket-booking portals and other services under their own logos.
“There’s no dominant player in (custom) app creation yet,” Hardy says. “For us, by adding that layer, we can now … say, ‘Hey, for a couple hundred more bucks we’ll give you your own custom app that ties all of this together beautifully.’”
The firm expects to finalize a public-placement round within the next 30 days that should raise “a few million dollars,” he adds, providing the company with a bit more financial breathing room.
“That’s going to give us the runway we need to keep entrenching ourselves further in the community as a dominant player with these three pillars of services,” Hardy says.
Getit already has a presence in Calgary, where about 30 businesses use its app, and has its sights on entering the Toronto market by early 2024.
Hardy says if all goes according to plan, the company’s balance sheet will be in the black within the next two to three years.
“We really do feel like we’re in a position to turn the tides and present a profitable business by 2025, 2026.”
