A Gatineau startup that uses drones to ship food, medication and other items has landed a tentative deal with one of eastern Canada’s biggest quick-service restaurant chains.
Hover, which was founded four years ago and incubated at Institut Innovation Gatineau, said last week it has signed a pending agreement with Pizza Pizza to deliver orders for the Toronto-based company starting in 2024.
Founder and CEO Cameron Rowe says Hover has been testing its service in southern Ontario for more than a year, conducting nearly 2,000 paid deliveries of medication, food and other items from downtown Toronto to customers on the Toronto Islands.
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Hover’s proprietary technology uses sophisticated image-recognition algorithms to help drones safely manoeuvre through highly populated urban areas. The unmanned vehicles, which have a maximum payload of about five kilograms, then hover about 30 metres above their destination, lowering their cargo to ground level via a mechanical winch.
Rowe, who is currently enrolled in Toronto’s Techstars accelerator, believes drones represent the next frontier in last-mile delivery.
The current system of third-party delivery services is costly and inefficient, he argues, because it typically relies on fleets of freelance drivers operating expensive motor vehicles. Based on the testing Hover has done so far, Rowe figures that drones could cut delivery costs for restaurants and other businesses by as much as 80 per cent.
“In a way, they’re complicating this process,” he says of current last-mile delivery services. “What we’re really trying to do is simplify it.”
Now at eight employees, Hover has been mostly bootstrapped. The firm has also received some backing from AirMatrix, a U.S. company that helps clients manage their drone fleets, and other partners in Toronto and the U.S.
Rowe says the company, which brings in six-figure annual revenues, is profitable thanks to contracts with a number of corporate clients, including Ontario wind farms that use Hover to deliver tools and other items to work sites. The firm has also signed a memorandum of understanding with the City of Nanaimo to start testing the technology in the Vancouver Island municipality.
But Hover executive Sharif Virani says the Pizza Pizza deal will supercharge the young company’s ascent, allowing it to “piggyback” off of the quick-service restaurant giant’s entrenched delivery service rather than having to develop a system of its own.
“Most pizza companies are, for all intents and purposes, really good logistics companies,” explains Virani, the firm’s head of growth. “The key was linking with a big Canadian brand, because that gives us an anchor.”
The company plans to charge a flat delivery fee to Pizza Pizza customers. Rowe says it will likely launch the service at suburban locations first, delivering within a target radius of about five kilometres from each restaurant.
Eventually, he hopes to hone the platform to the point where residents in downtown highrises can get their piping hot pepperoni pies delivered right to their balconies.
In the meantime, Hover keeps hunting for more financing, both in Canada and south of the border. Rowe is in northern California this week pitching to potential investors, and the company is aiming to close a US$1.5-million seed round before the end of the year.
“We’re in that sprint phase right now,” Virani says. “There’s no reason why you can’t build a company with purpose in Canada and then look to scale it after. In a way for delivery, it’s super ideal, because it is really hard conditions in Canada. If you can operate here, you can operate anywhere.”