Restaurant logistics startup Captain AI has secured $2.1 million USD in seed funding to fuel its go-to-market efforts in Canada and the United States (US).
Captain AI, which was founded by Canadians but initially launched in the United Kingdom (UK), has spent six years quietly building an artificial intelligence (AI) platform designed to help restaurant chains manage and improve their in-house food delivery operations.
“The unit economics of having your own driver fleet are better than relying on a third party to do those deliveries if you’re using the right tech.”
– Ryan Perera, Captain AI
Now, with a fleshed-out offering, Pizza Pizza as its anchor client, and fresh capital from Canadian investors like GreenSky Ventures (which led Captain AI’s seed round) and Techstars Toronto, Captain AI plans to relocate to Canada and expand its presence across the continent.
“We have a strong customer base in North America,” Captain AI co-founder and CEO Ryan Perera told BetaKit in an exclusive interview. “Our expansion is really focused on having an established base in Canada, reincorporating in Canada, and continuing to work with our American and Canadian customers.”
Perera said Captain AI’s work with the country’s largest pizza chain, Pizza Pizza—which has over 730 locations in Canada—was the “biggest factor” in its decision to move back to Canada, adding, “We really look forward to a long-term partnership.”
Captain AI’s equity seed financing, which closed earlier this month, also saw support from other undisclosed investors. It brings the startup’s total funding to $4.6 million. Perera declined to disclose Captain AI’s valuation.
Founded in 2017 in London, UK by Perera and head of design Dihan Algama, Captain AI sells AI-powered software designed to help chain restaurants improve delivery speed, optimize kitchen workflows, and improve customer experience. The startup has already helped Pizza Pizza enable nationwide live order tracking.
This was not always the company’s focus. Captain AI’s origins were as a 60-minute delivery startup and early Deliveroo competitor called Henchman, which Perera and Algama launched in 2014. A portion of Henchman’s work involved developing its own software to increase the efficiency of its delivery drivers, predict how many are required, and dispatch them accordingly.
“There was an ‘a-ha’ moment where we realized this technology—that we built for ourselves as a delivery company—could be really valuable to restaurant chains,” said Perera, adding that they sold Henchman to Rico Logistics in 2016 to focus on doing just that.
After doing the deliveries themselves through Henchman, Perera argued that he and Algama have a unique understanding of the problem that Captain AI is now trying to solve.
Some restaurants rely on third-party services like Uber Eats and DoorDash, which take a sizeable cut out of every order, while others offer food delivery via their own fleet of drivers. Per Perera, most restaurants in the latter group are not currently using technology to manage their drivers. Though this tech-free approach can be cheaper, it is also typically less efficient and transparent. “It’s like you’re operating in the dark,” he added.
As Perera noted, the stakes are rising. The growing popularity of food delivery platforms has helped fuel a broader shift in consumer expectations. “Some customers may not order from you unless they can be given an ETA and a live tracking experience,” he said. “They may prefer to order from a third-party app.”
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Enter Captain AI, which is developing a platform that aims to help restaurants that deliver using their own drivers improve their guest experience and operational efficiency.
“The unit economics of having your own driver fleet are better than relying on a third party to do those deliveries if you’re using the right tech,” argued Perera.
Captain AI participated in Techstars Toronto’s 2022 cohort. Perera credits Techstars for helping convince the startup to move to Canada, where it intends to incorporate by early next year.
“There was an ‘a-ha’ moment where we realized this technology … could be really valuable to restaurant chains.”
– Ryan Perera, Captain AI
From a product development standpoint, Perera is particularly excited about the smart kitchen system that Captain AI plans to launch soon, which will advise cooks what order items should be cooked in based on which drivers will return first.
Today, Perera sees more demand for what Captain AI is building in North America, citing the size of the market in Canada and the US and the customers that Captain AI has already landed in both countries.
While Captain AI already processes over 500,000 deliveries monthly around the world, Perera still sees plenty of room for growth. “We’ve spent many, many years focusing on product, and we haven’t really taken our product to market yet,” he said.
For now, the main goal is to bring Captain AI to more restaurant chains across North America. To accomplish this, Captain AI plans to invest a significant portion of its seed funding into sales and marketing.
Feature image courtesy Pexels. Photo by Polina Tankilevitch.
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Originally published on BetaKit : Original article