Can You Guess The 3 Reasons Why Your Dog’s Poop Is Making This Company Rich?
(This post originally appeared on Inc.)
Penelope is the best dog in the world. That’s because she’s my dog, of course, although I’ll admit that every dog-owner feels the same about their dog too. But as great as she is, Penelope is just a dog. And even Cavalier King Charles Spaniels, as regal as they may seem, have to poop. Like many, everyone in my family is out at work or school during the day. So we have a dog-walker take Penelope around the neighborhood at lunchtime so she can poop. We found our dog-walker through Rover.
The now 170-person company was founded only five years ago and has since raised more than $91.5 million to expand its dog-sitter platform to more than 65,000 sitters across 10,000 U.S. cities, and booking more than a million services per quarter. Its annual revenue run-rate is about $100 million and has grown more than three times since last year. The company’s founders plan to do an IPO in the future and when they do they will deservedly get rich. They deserve to get rich for three reasons.
They’re raising cash while they can.
It takes a lot of money to pick up Penelope’s poop (go ahead – try to say that three times in a row).
Last week the company announced a $40 million Series E round of financing from venture capital firms. The venture capital market has been softening and it’s not as easy to raise money as it was just a few years ago. Rover has demonstrated its model, built up a ton of customers and has shown itself to be an attractive investment, despite the smelly work it does. So rather than going public now management rightly decided to let a few others in on another round of investment while there’s still cash available to invest. “While this may be our last round before a public offering, there is nothing about where we are at that makes me think we are maturing as a business in terms of seeing growth slow down, or that we’ve somehow reached our potential,” the company’s CEO, Aaron Easterly, explained in the above GeekWire interview.
Smart companies accumulate capital when it’s available and cheap. And, for Rover, it is.
They’re positioning for the future.
Admit it: your dog is your life. You want to know what she’s doing while you’re at work. You want to know if she took a good poop at lunch. These are the things you talk about with your spouse over dinner. You admit this is a sad life. Bu take heart – and join the crowd – I’m the same. We are interested in our dogs’ poop!
Rover’s management knows this because they’re paying attention and learning from their customers. They’ve learned that their customers want to know the minutest details about their pets, even down to the molecular composition of their poop during the day. They also know that their sitters love their jobs, but also want to make more money. So the company is focused on improving the experience for both. The company continues to grow its dog-sitting business, but new ideas have emerged. They’ve learned from their customers that more services would be welcome, particularly the ability for drop-in visits, a GPS map of the dog’s walk, photos of the dog, notes of bathroom breaks. “The daytime services business is exploding and has taken off a lot faster than we thought,” Easterly said. He’s also making sure his sitters are benefiting by providing them with the opportunity to make more money from all these services.
Smart companies are always customer focused. Rover is focused on both of its customers: the end user and the sitter.
They’re investing, before profiting.
According to the GeekWire interview, the company does not expect to show profits until at least 2017. But the reality is they could have been profiting sooner. Instead, the company continues to invest in its core technology and raise more money while they can to do this. The company will be using the money raised to improve its technology and position itself for expansion. The data shows that there are more households with pets than with children and many still remain unaware of Rover’s services. The company has its competition, yet sees opportunities overseas and the care of other pets – from pigs to shrimp (wait…shrimp? Exactly how much can a shrimp poop?).
Smart companies don’t just take the money and run. They plow it back into the business with a long term approach towards profitability.
Rover’s getting rich off of poop. Good for them – they’re doing the right things. Oh, and good for Penelope. I just heard she had a good firm one today. Hooray!