It’s not a joke — not to venture capitalists who’ve recently been funding all things dog related, including online marketplaces that connect pet owners with carefully vetted sitters. One such business is 20-month-old DogVacay in L.A., which raised $6 million from Benchmark Capital last November. Another, Seattle-based Rover — a two-year-old startup that has already raised nearly $16 million in funding from Madrona Venture Group, Foundry Group, and Petco — will be in the market again soon.
I talked with Rover CEO Aaron Easterly last week about his 26-person company and whether VCs can make money on the concept. Here’s an edited transcript:
You have close to 200,000 pet owners signed up to your platform, and about 25,000 dog sitters. How much repeat business do you see?
The repeat usage and stats are incredibly predictable. Once people discover Rover, they stop calling in favors with friends and family and start calling us for day trips and weekends away.
What’s the average stay, and how much do sitters charge?
The average stay is a little over four days, and prices range from $20 to $45 a night. A sitter who can take the dog to work or work from home, or someone who has access to parks or a backyard [can often] charge more. Also, as a sitter develops a reputation, that person can increase his or her prices.
What does Rover collect?
We collect a 15 percent fee on each transaction. We also offer add-ons that people can select, like an annual $49.99 protection package that includes a 24/7 vet consultation and special Rover tag for added safety and security.
Some VCs might wonder how tech-heavy your platform is.
You’d be surprised at the analytic rigor that we apply to the business. We only accept about 15 percent of new applicants. We use data modeling and statistical techniques pulled from other industries, so in addition to having a human being vet every applicant who comes into the system, we can predict how successful that person will be within a certain amount of time [among numerous other things], all of which goes into improving the marketplace.
How many dogs can a sitter watch at once, and how much money can they make?
They can watch one dog or two but not seven. We have some pet sitters making over six figures annually, and that’s growing.
What’s your growth strategy?
We see three ways: through geographic expansion, which can include international; by expanding to pets other than dogs; and by expanding our service range to include things like bathing and walking services and things like that.
How big is the U.S. market, where people seem particularly likely to treat their pets as children?
The dog boarding/dog sitting is roughly $6 billion annually in the U.S., but it could be much, much bigger. Many pet owners just despite the idea of taking their dog to a kennel. To them, it’s like taking a kid to an orphanage, a place where dog might sleep and get a meal but could have a terrible experience. If every dog owner used an inexpensive solution like Rover, it could become a $61 billion business. The opportunity here is to figure out this market — which involves just 8 to 9 percent of pet owners — and increase it.