As the pandemic hit earlier this year, Rover’s business evaporated. The shift to remote work and limited travel reduced demand for its services. The Seattle pet care startup laid off 41% of its workforce in March, or nearly 200 employees.
But seven months later, Rover has bounced back in a big way due in part to increased pet ownership amid the pandemic. Revenue is accelerating again and the company is growing its market share.
The latest sign of Rover’s resurgence is a new partnership announced Wednesday with Walmart. The retail giant just rolled out Walmart Pet Care and will promote Rover through Walmart.com. Customers who book Rover services through Walmart Pet Care will get a $20 Walmart gift card on the first booking, and another $20 if they complete five Rover bookings in six months.
Rover is benefitting from several tailwinds in recent months. With more people getting pets this year, the overall market for pet care is expanding. Some of its competitors such as physical dog daycares are also not seeing as much traffic with social distancing mandates and people working from home.
Rover CEO Aaron Easterly said the company was on track to do around $500 million in gross bookings this year, but will likely only reach half of that. Yet at the same time, Rover has also trimmed expenses heavily and may reach profitability sooner than it planned before the COVID-19 crisis. Rover declined to disclose revenue metrics beyond gross bookings.
The layoffs were painful, Easterly said, but Rover’s business is now leaner and more efficient.
“The business is probably more valuable now than it was immediately prior to COVID, which is a little mind-blowing,” he said.
Rover pulled down its debt lines earlier this year and landed more than $5 million from the Paycheck Protection Program. Easterly said he doesn’t expect the 250-person company to need more capital. Rover has raised $281 million in equity funding to date.
Rover counts more than 1 million households as customers, and has 300,000 service providers. On the heels of a $155 million funding round in 2018 that valued the company at a reported $970 million, Rover had been accelerating its expansion in Europe, entered Latin America, and added services for cats.
Other digital pet companies are seeing growth this year. Online retailer Chewy, for example, is adding customers at record pace and its stock price has doubled since March.
Rover, which was founded in 2011 and born out of a Startup Weekend event, moved into a new 75,000 square-foot headquarters in Seattle earlier this year.
“I miss the dogs, and I miss the employees. It’s hard,” Easterly said as the company continues to work-from-home.
Easterly is learning leadership lessons during this roller coaster year. With employees working remotely, he said “you just have to be a lot more intentional about communication, context, and checking in on the human side of things.”
Speaking at a GeekWire Studios virtual event in September, Rover CFO Tracy Knox said her lessons from this year are pivot, act fast, and over-communicate, especially with investors.
“The phrase ‘prepare for the worst, hope for the best’ has never been more acutely felt,” Knox said.
