A Dog-Eat-Dog Deal for Online Pooch-Sitting Service Rover.com
This week online pet-sitting platform Rover.com agreed to purchase rival DogVacay in an all-stock transaction.
Deborah Cohen
Editor-in-Chief
Middle Market Growth
Woof!
While Uber’s cultural shortcomings have stolen the bulk of the latest headlines on the fast-growing sharing economy, online players in the burgeoning pet services industry are busy chasing their own juicy bones.
In the latest deal worth noting, this week online pet-sitting platform Rover.com agreed to purchase rival DogVacay in an all-stock transaction. In what some have deemed a canine Airbnb, the combined platform of the two biggest VC-backed startups in the space will connect more than 100,000 freelance pet-care providers with time-strapped owners in all 50 U.S. states and parts of Canada.
MMG interviewed Rover CEO Aaron Easterly, a former executive with Microsoft’s publisher solutions group, in March of last year.
“It’s a decent sized business and it’s growing at a really good clip,” he told us, noting sales had been tripling year-over-year and he hoped to take the business public. Easterly reiterated his desire to do an IPO when discussing the deal with media this week. He will maintain leadership of the merged business, while DogVacay’s CEO, Aaron Hirschhorn, will stay involved during the integration and take a seat on the board.
Total bookings for the combined business amounted to about $150 million in 2016. That’s a lot of doggie visits, and it’s likely to be a lot more.
Pet products and services, which includes everything from specialized nutrition to high-end day care and insurance, is expected to log sales of $69.4 billion this year, having more than quadrupled since 1994, when it tracked at $17 billion.
Easterly told the Seattle Times that the combined company will focus on international expansion and the possible introduction of other pet-related categories.
Private equity has backed a variety of pet industry concepts – from Roark Capital’s investment in retailer Pet Supermarket to Wafra Partner’s stake in treats maker Phelps Industries (an MMG cover profile in March/April 2015), just to name a few.
Given the increasing status of pets in households throughout most of the developed world, investor interest in the space shows few signs of diminishing. MMG will be watching to see how private capital shapes the industry.
