Online dog sitting marketplace Rover.com has a new best friend: Menlo Ventures.
The Silicon Valley venture capital firm, an early backer of Fab.com, Uber and Tumblr, is leading a $12 million investment in the Seattle startup. That brings total funding in the 43-person company to nearly $25 million, making it the most heavily funded of the online pet sitting marketplaces.
Rover.com and its chief rival of DogVacay often draw laughs from critics who believe the companies aren’t legitimate tech businesses, harkening back to the dot-com boom days of Pets.com. But just as Uber and Lyft are now attempting to upend the traditional taxi cab market by allowing just about anybody to become a cab driver, so too are the online pet sitting marketplaces, transforming how Americans find overnight care for their beloved pets.
“Sitting in Silicon Valley, I’ve heard a lot of those naysayers,” says Menlo Ventures’ Sunil Raman when asked about the critics of the pet sitting businesses. But Raman, who is joining the Rover.com board, said they took an academic and quantified approach to the investment.
“If you look at just the existing pet sitting market, it is anywhere between a $7 billion and $12 billion,” he said. “At Menlo, we have been very strong marketplace investors in the past, and what we see is how mobile and the sharing economy have really served as a means to redefine a number of industries. Look at lodging. Look at transportation.”
Interestingly, Rover.com doesn’t have a lot of the regulatory hurdles now facing businesses such as Airbnb and Lyft. Some cities and states do limit what constitutes a commercial kennel, limiting the number of dogs allowed to be housed at any given time. In Seattle, for example, the rule is no more than five dogs.
But, for the most part, those regulations don’t have an impact on Rover.com, which is designed to connect pet sitters with just one or two animals.
“We don’t really see the same type of regulatory scrutiny as Uber of Airbnb,” said Rover.com CEO Aaron Easterly. A small number of states require formal registration for pet sitters, but Easterly said no states limit the number of licenses in the same way that government agencies allocate medallions for taxis.
With the new funding in place, Easterly said Rover.com is looking to attract even more pet owners, finding those who don’t want to place their pets in traditional kennels. The company also is expanding its definition of pets, with Easterly noting that they’ve now had cats, reptiles, horses and even a pot-bellied pig move through the marketplace.
In addition to new categories of pets, Easterly said they will look at international expansion and potentially new services to layer onto the platform. They plan to double the staff in the coming year.
First conceived at a Startup Weekend event in Seattle three years ago by venture capitalist Greg Gottesman, Rover.com has grown fast in recent years. It now has more than 25,000 registered pet sitters across the country, though many more have applied. Easterly said they accept just 14 percent of pet sitter applications, denying some after conducting background checks.
Rover.com’s revenue grew by more than 800 percent last year, and new sitters are now making more cash than they did 18 months ago. Easterly declined to disclose revenues, but said “millions” of dollars are now flowing through the platform, and its top markets now have hundreds of thousands of dollars flowing through Rover on a monthly basis.
Even so, Easterly said that they were likely going to have to raise more cash in order to keep growing the brand. “This is a scale business,” he said. “We decided to raise early, because we see some clear opportunities to accelerate the business.”
Rover.com raised cash last summer, pulling in funds from strategic investor Petco and others. Easterly said they hadn’t touched that cash, but they wanted to bring on Menlo as an investor given its expertise in helping to build other online marketplaces, specifically Uber.
“We saw an opportunity to move ahead a little bit earlier than we planned, so we took it,” said Easterly, a former aQuantive employee.
