When SoftBank's $100 billion Vision Fund writes one of its sizeable checks to back a startup, the competition has to up its game.
Seattle-based dog-walking and pet-sitting company Rover said on Thursday it had raised $125 million in cash plus $30 million in credit, just months after SoftBank said it would pump $300 million into dog-walking company Wag.
Rover Chief Executive Officer Aaron Easterly said the SoftBank Group Corp. cash injection into Wag didn't affect his own funding or growth strategy. "What honestly went through my mind was, 'That's curious,' but it didn't change our plans," Easterly said Tuesday. "The size of the investment was large and arguably surprisingly large."
Rover’s new round, led by T. Rowe Price Associates Inc., brings its total funding raised to $311 million. The company currently has $200 million in cash including the credit with Silicon Valley Bank. Rover plans to use the money to help fund international expansion, starting with the United Kingdom in July.
Money is flowing into pet startups in general as investors try to tap into what Easterly said was an $85 billion pet-care market, with annual growth steadily outpacing the growth of the U.S. economy. Last year, pet supplier Chewy.com sold to PetSmart Inc. for more than $3 billion.
Until recently, the sector had fallen behind technologically as Silicon Valley held onto dark memories from the dot-com crash, when companies like Pets.com failed in spectacular fashion.
"This is a category that is poorly understood, does not have major tech players in it, (and) is a deceptively large opportunity," Easterly said. The growth of the business relies less on stealing market share from a competitor and more on getting consumers to start paying for a service they would otherwise do themselves, or ask a family member or neighbor to take care of, he said.
Wag, which is planning its own international expansion, has raised a total of $362 million.
©2018 Bloomberg L.P.