How A Great Dane Inspired Bark

Issue #19

August 15th, 2023

Quick Hits:

• This incredible story will remind you how amazing dogs are

• A Geopolitical Royal Whoopsie

• Cats, the story

• A lot of people we don’t know holding a lot of cute dogs

• Trending on TikTok - DINKWAD - Double income, no kids, with a dog (no, we’re not making it up) are you a DINKWAD?

BARK’s founder and CEO Matt Meeker started BARK because of his Great Dane, Hugo. In 2011, Matt and Hugo lived in Brooklyn and quickly came to find that New York City pet stores did not cater to big dogs. Matt found that most dog products fell into a “one size fits all” category and he couldn’t find anything specific to Hugo’s size.

Some background, in 2002, Matt co-founded Meetup, the largest network of local communities that meet offline about shared interests and passions. So Matt was no stranger to big ideas and great execution.

At the time, the subscription industry was heating up, but there wasn’t a company that catered to dogs with toys and treats specific to their size mailed to their homes on a monthly basis. Matt pitched this idea to Henrik Werdelin, who he had met on a cruise ship some months before, and they decided to spin up a website using a WordPress template to start showing it to friends and acquaintances. People immediately showed interest and word spread fast.

As they picked up steam, they brought on Carly Strife to run the business, launch a real website, and sign on vendors and partners. Carly had recently moved to New York to launch Uber in the city, but she wanted to be a founder and also loved dogs. Together, they brought BarkBox from a WordPress template and BarkBoxes packed on their office floor to today, a publicly traded company on the NYSE that serves over 2M active subscribers each month direct to consumers and in over 40k retail stores.

Since launching in 2011, BARK has served more than 6.5 million dogs, and the company has used that accumulated expertise to create its own products (1,000+ every year), experiences, and content. The company recently launched BARK Food which provides healthy meals and accessories tailored to the dietary needs and individuality of specific breeds to help them be their best, happiest, and healthiest dog-self.

Before going public, the company raised $57M of outside capital. As of 2023, there are 65.1M households with dogs (source), up from 60M in 2020, and investors continue to see the tremendous opportunity to reach millions of dog parents across the country whether that’s through a monthly delivery of toys, treats and food, or purchasing products for their dogs in retail stores.

In 2020 Matt stepped down as CEO, and Manish Joneja became the CEO, for about 16 months. In early 2022 he decided to step down in order to spend more time with his family. Matt became the CEO again.

According to PYMNTS: “In fiscal 2022, the company experienced a cash burn of $194 million. In fiscal 2023, this figure improved to $17 million, with the second half of the year even generating a positive cash flow of $17 million.

Breaking it down by channel, direct-to-consumer (D2C) revenue fell 1.5% from the previous year, to $116 million, while wholesale revenue dropped by 9.3% to $10 million. These declines coincided with a 15% increase in advertising and marketing expenses, totaling $15.4 million in Q4.

The company reported net losses for the fourth quarter due to lower ordering volume. However, there was an improvement compared to the previous year, with the losses narrowing to $14.2 million from $36.7 million.”

BARK offices have been in the news for how dog friendly they’ve always been. The company conducted a study revealing the changes in American workers’ relationships with their dogs and the realities of pets in the workplace. The survey showed that dog parents missed their dogs when they went to the office; seven in 10 (71%) dog parents who were working from home believed they would miss their dog if they returned to the office, and 3 in 4 (72%) of dog parents who already returned to work missed their dogs went they went to the office.

This is why their office is designed to be doggy heaven.

From choosing a color for the office that dogs can see, to creating spaces for humans and dogs to create and collaborate, BARK considered every aspect of catering to employees and their dogs throughout the office design - even including an indoor dog park with a ball pit for dogs and bar for humans.

BARK continues to innovate with clever toys, treats, nutritious food, and accessories across retail stores, e-commerce, and experiences. BARK is always striving to think of new, creative ways to reach more dogs and bring dogs and humans together, whether that’s through creative BarkBox themes and licensing partnerships, or growing its retail footprint.

Such as their recent partnership. BARK joined the Subaru Loves Pets™ initiative in celebrating their annual National Make A Dog’s Day. In 2022, BARK gave away welcome kits to 7,000 pet parents who adopted during Subaru’s National Make A Dog’s Day.

• New innovative toy company - Two Industry veterans just launched GURU Pet Company, with a mission to develop products that challenge dogs’ minds.

• Animal actors are on strike too - an entirely underrepresented group of actors is also suffering.

• The Korean government plans to double the size of the pet care industry while large telecommunications are also seeing the potential in the pet space.

• Pets with benefits - Companies are betting that pet benefits will attract new employers.

• Doug The Pug - The Instaceleb is launching his own wellness brand.

• Greenies - Just launched a new digestive probiotic supplement powder for dogs.

• Pet Telehealth - Airvet recently raised $18.2 million to expand pet telehealth services to enterprises.

PAWS right there!!! Don’t forget to subscribe 👇👇

• Tiktokers donate $50k - After the Asher House suffered an outbreak of a rare type of pneumonia.

• Animal Sanctuary reopens - After being shut down during COVID this sanctuary finally reopens.

• Hustle Young - The industrious 12-year-old started her own company.

• The best party of the year - 1 dog turned into 2 dogs turned into 3 turned into a partyyyy. 🎉 

• Cat menu for humans - Fancy Feast’s principal chef, introduced several cat food-inspired dishes to cat aficionados in NYC.

• Shift in attitude - More people are looking to adopt than to shop.

• Pet goat with his dog best mate at a local beach cafe - the headline really says it all.

Funding

Let's cover the three main ways to raise money:

Bootstrapping - Probably the hardest one to do but also the most rewarding down the road. You effectively use your own cash/savings to invest in your own business. You remain your own boss. No outside investors or lenders to introduce specific requirements for you or your business. However, this is also the riskiest. If things go pear-shaped, it's only you who lose. The flip side is, of course, you are the only one who has the gains. If you go down this road, perhaps ring-fence a certain amount of capital and give yourself time to see where things are heading. Don't commit everything all at once because you never know how things pan out.

Equity - When you raise capital you effectively give investors shares in your business. Think about this as selling a part of your business. You are bringing a partner (or some partners) who will share in the upside and downside with you. Equity investors can get pretty involved in supporting you grow your business, so you want to make sure you get along (this is the beginning of a very long friendship, even marriage in some cases). It's important you align on expectations and goals. For example, some investors may expect a monthly report showing the financial state of the business - make sure you know this, because these things take time and effort, and you want to do right by those folks who supported you in the early days.

Debt - You may also raise some money from the bank or from some lenders. This will be in the form of a loan you take. So, one thing you will have to think about is those interest payments and whether you can afford them (sometimes, not meeting your interest could mean you go "bankrupt", so double-check the terminology). Lenders, which could just be your bank or a sophisticated individual investor, don't tend to get as involved in the day-to-day of the business as equity investors. Instead, there are just some things you need to normally check with them and get approval on, so again, read the small print here.

In general, equity investors care about how you grow the business while lenders want to make sure you can pay your interest and not lose their money. Think about this as you craft your "pitch".

You reached the end, you deserve a treat 🍖

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Fsh.

See you next week!

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