28 Dec Hot Dog: The $5 billion Uberesque Dog Sitting Market
The UBER-like dog-sitting market is heating up. Not only does it create fierce competition between fast-growing companies like Rover and DogVacay, but investors are also pouring in money at a tempo similar to the ride-sharing and food delivery markets.
Last week, the online platform for dog owners Rover raised $40M in a Series E round led by Foundry Group and Menlo Ventures, with participation from Madrona Venture Group. According to Zirra’s database, the Seattle based company has raised $104 million to date, and is now valued at more than $350 million.
Photo Credit: Rover.com
Rover rival DogVacay, another dog owner platform from the West Coast, has raised $47 million to date, with the most recent round completed two years ago. It is valued at more than $150 million, according to Zirra
Rover and DogVacay are the Coca Cola and Pepsi of the dog owner platforms, but they are not alone in the market. Wag! from San Francisco, another app that gives access to quality dog walkers, announced a $2.45 million seed round last year. Swifto, which represents the East Coast and the 3 million dogs living and kicking in NYC alone, raised $2.5 million more than three years ago, and is not looking for any additional funds these days.
Most of them share a common interface: a map that helps you track the dog, a description of the dog’s activity during the walk, and an interface that helps you filter dog sitters or dog walkers.
Big Dog (care) Market
How big is the pet care market? Together with pet products, the neighboring market, it’s been labelled as “recession-proof” by Forbes. U.S sales in the industry is currently at $60 billion and expected to grow. The estimated total for U.S. pet industry expenditures in 2016 is $60 billion, out of which $5 billion, or 8%, will be spent on pet services like walking, sitting, and boarding. DogVacay’s CEO Aaron Hirschhorn told TechCrunch just yesterday that he estimates boarding will be a $7 billion market, but he didn’t say when.
Rover.com is the market leader, and not just in terms of funding raised. Rover claims 65,000 sitters, and boasts more than double the amount of sitters that DogVacay currently has. Rover also has a larger percentage of their workforce devoted to Engineering than DogVacay. As it currently stands, Rover is out performing DogVacay in most metrics.
Rover boasted that it tripled its revenues last year, while TechCrunch said yesterday that DogVacay has a yearly run rate revenue of $70 million. TC also claimed that DogVacay would reach profitability in 2017.
Photo Credit: Rover.com
According to Zirra, Rover is valuated at about $350-$400 million post-money, while some media outlets estimated the round to be at a $300M valuation. DogVacay’s valuation is about half of Rover, and Zirra estimates it at around $150-$200 million.
In addition, Rover’s chances of reaching an exit are relatively high after their last round. Zirra estimates Rover’s exit probability at 50-60%, while DogVacay’s exit probability is estimated at only 10-20%. However, there is strong momentum behind both of these, so their numbers can be expected to grow significantly.
Who let the dogs out? These guys
The dog boarding market has been pretty crowded for a few years now. DogVacay started as a general dog boarding service on a nightly basis, a doggy version of Airbnb, if you will, that includes customized service based on whatever dog owners request (dog walking, dog sitting or drop-in visits).
Customers can browse for sitters and places near them. Once they have found a suitable host for their pet, they can book and pay securely online. Once the date arrives, the pet is either dropped off at the place, or sitters who offer home visits and day care will arrive to the customer’s house to provide services for the duration of the booking.
Zirra’s insights on DogVacay
Rover, on the other hand, started as a dog sitting service that later added a dog walking service. Rover also recently introduced an app allowing care providers to share information with dogs’ owners, including photos, messages and GPS-powered maps of dog walks.
Swifto, from the East Coast, is mainly focused on dog walking services and helps owners track their dogs on the map. Zirra has learned that Swifto is already profitable and is not looking for further investments, although it raised just $2.5 million more than 3 years ago.
Another player is Fetch Pet Care, which offers a supermarket array of pet services. The company dates from the previous decade, and is not showing the same tech and product ambition that Rover and DogVacay posses.
Dog Walking Apps will Seek Collars
In recent years, there have been many startups bringing innovative ideas to the world of pet care, which is driving even more growth in the industry along with luxury services, natural and organic food, toys, and treats. As with humans, older pets are where the majority of costs come from, which also drive growth in the industry with people willing to spend more and more on high-tech medical therapies and vet services.
Pet wearables market size will reach $2.36 billion by 2022, according to Grand View Research. It is a younger and much more regulated market than the online pet platforms market, but Avi Menkes, CEO of PetPace, developer of a smart collars for pets, says that the two markets will collide.
It makes a lot of sense: imagine a dog walking platform that uses a collar full of sensors. Besides tracking the dog’s route, it can tell you automatically what the dog is doing. “Think of a collar that can tell you if the dog runs, if he defecates, if he rests, or if he’s playing with his friends”, Menkes says. “Today it is done manually, even within apps that have raised dozens of million of dollars”.
“Not all the dog online platforms are searching for such a solution,” says Menkes. “but there are some who are looking at the near future and see pet wearables that can talk with your phone via bluetooth and report every dog’s move”.
It’s only a matter of time, then, until DogVacay, Rover, or Swifto will offer dog owners a collar and an app that will allow them to better understand their dogs.