Take The Leap (Venture)

Issue #35

December 5th, 2023

Quick Hits:

🐶 We need Pets in the workplace, it’s science!

🧬 Loyal moves one step closer with dog longevity drug

📉 A disappointing third-quarter earnings for Petco

🥩 The 6 stages of begging

🐱 A cat purr website, yup the internet’s got it

🏠 Is this the best dog house, like ever? 

• Massive acquisition - Rover agrees to be acquired by Blackstone in a massive $2.3 Billion transaction.

• Lassie come home - Lassie, the pet health app and insurance provider raised €23 million in Series B funding. In total, they’ve raised €36.5 million.

• Gang Gang - Woof Gang is set to expand to two new states in 2024.

• Synchrony Financial - is selling its Pets Best Insurance Services subsidiary to Poodle Holdings for a gain of $750 million.

• Finnish pet care - Musti Group Oyj received an offer valuing the Finnish chain of pet-care stores at €868 million ($954 million).

• Paw Prosper acquires K9 Carts - The pet health and wellness platform just acquired a world-renowned pet wheelchair company.

• Pet Gels - Bioriginal Food & Science Corp. has acquired all operating assets of Softgel Co.

• Excellence in business - Here are some recent winners in the pet space

• APPA making moves - The American Pet Products Association (APPA) has acquired The Pet Summit, an educational conference and online platform.

• Jolly Good - Jollyes, one of Britain’s largest private pet food brands could be changing hands for £100m.

This week, we talked to Rachel Sheppard who is the Director of Ventures at Mars Petcare and the Co-Lead of the Leap Venture Studio program.

What is Leap Venture Studio? What is Leap Venture Academy?

Launched in 2018 as a partnership between Mars Petcare and Michelson Found Animals, Leap Venture Studio & Academy is the world’s first pet care startup accelerator dedicated to empowering pet care entrepreneurs to achieve their goals.

Our Studio is an annual 12-week-long customized program for early-stage pet care founders to receive mentorship, networking opportunities, and $200K in venture capital funding. To date, we have invested in 45 companies, across 15 countries, that have gone on to raise over $200M in follow-on capital, and our portfolio includes 2 exits. 

Leap Venture Studio is the world’s first pet care startup accelerator. Firstly, what is your role in LVS, and secondly what did LVS notice in the pet market that they decided to focus solely on pet care startups?

I serve as a co-leader of the Leap program in collaboration with Paige Ellen, the Senior Program Manager at our partner organization, Michelson Found Animals Foundation. Our role is to support pet care startups along their journey both through programming and strategic connections.

Leap is a partnership between two organizations dedicated to serving pets and pet parents. It was only natural for us to extend our combined expertise to scale innovation in the pet care industry.

How did the partnership program between LVS and Mars Petcare form? Mars is the biggest pet company in the world, how have you benefited from their backing?

Leap is a partnership between Mars Petcare and Michelson Found Animals Foundation. With this partnership, Leap companies have access to the combined networks of both organizations. I think having a partnership at the center of our program increases the value for founders and helps us look for innovations outside of Mars Petcare’s established segments. Not to mention the partnership represents the spirit of collaboration that Leap hopes to exemplify. 

What is the current breakdown in the pet category, dogs are obviously "top dogs" but what are some other interesting startups that are not dog-focused?

Cat parents, an underserved market seeking innovative solutions, comprise the second most popular pet category in the US, with 370 million cats globally. At Leap, we have invested in some interesting cat-focused companies such as:

Moggie is an AI-powered wearable technology that sends notifications whenever your cat has an “update” for you. This helps cat parents stay alert about their cat’s health and well-being. Additionally, we have invested in Smalls, which is a fresh food company just for cats based in the U.S.

October 15th was the last day to apply to next year's cohort, how many applicants applied? What are some that you are excited about? What do these startups receive upon being accepted into the accelerator program?

The response for this year's cohort was incredible, with over 200 applications coming in from 42 countries underscoring the internationalization of the pet care industry. The diversity of innovation was evident, with an increase in solutions focusing on veterinary medicine and diagnostics. 

Selected companies entering the accelerator program will gain access to comprehensive support from the Leap team. This includes personalized mentorship from industry experts, specialized programming tailored to their needs, engagement in a bespoke services project with R/GA Ventures, and a $200,000 venture capital investment.  

• Trump loses to dog - Trump failed to get hold of the mar-a-lago.com domain which belongs to a Florida resident who claims to have registered the domain in tribute to his pets that have died.

• Mystery respiratory illness - Could a powerful antibiotic be the cure?

• 1 million dollar grant - A Pedigree Foundation grant will help almost 100,000 dogs across US shelters.

• Mixed emotions - 200 cats will be removed from the historic seaside tourist area of Puerto Rico’s capital

• Operation Santa Paws - A heartwarming initiative to help animal shelters.

• Is mom home? - Angie Harmon’s daughter has a creative way of “fooling” their dogs when they are not home.

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

Movie suggestion: We watched LEO on Netflix over the weekend. It’s a fun animated movie starring Bill Burr (who voices the turtle) & Adam Sandler (who voices the lizard). If you are looking for a light, funny, heartwarming movie, we suggest you check it out.

4 key insights from Rachel Sheppard

Advice for founders that want to enter the pet space, where are you seeing the most promise right now within the pet space (food, telehealth, etc...)

In my opinion, solutions focusing on increasing access to veterinary medicine and improving pet healthcare outcomes are imperative to the future of our industry. I’m particularly drawn to tools and solutions that are helping us “listen” to our pets better. For example, we know a few solutions that are helping us better understand and create treatment plans for pain management, which can be game-changing for the future of veterinary medicine, particularly for our senior pets.

You currently have 2 companies that have been acquired in your portfolio. What is the process of supporting founders from accelerator to acquisition? What is the standard investment you make?

Two notable success stories within our portfolio are Lacuna Diagnostics and PetHospice, both of which have successfully exited to Heska and Bluepearl Specialty and Emergency Pet Hospital, respectively; both these entities are under the Mars umbrella.

Most importantly, we have had the wonderful opportunity to work with amazing founders who built needed solutions for the industry, and their hard work and dedication led to their success and ultimately, acquisition. 

That said, we are here to support our founders where possible. Our commitment to supporting founders extends far beyond the accelerator phase. Post-program, we remain actively involved in guiding and assisting portfolio companies however we can. Our dedicated support is tailored to the specific needs of each company, irrespective of the phase they find themselves in. 

When assessing founders or teams, what specific qualities or characteristics do you consider aside from the core idea? Any common pitfalls they should avoid? What factors make them more appealing to potential investors?

We thoroughly assess market potential and viability. Examining the competitive landscape is equally critical to determining the startup's position and potential market share. Our focus on the founding team is robust, seeking individuals with relevant expertise, industry knowledge, and a unique viewpoint on the problem they are solving. One pitfall to avoid is building a solution before you’ve proven the problem is a big enough pain point. Traction is critical to success, so finding ways to prove traction early is key in showcasing demand. 

Can you share examples of successful pet-related startups in your portfolio, and what attributes or strategies contributed to their success?

We have so many wonderful portfolio companies that I’m proud to work with (Startup Portfolio | Leap Venture Studio). I do consider it to be a true honor to play a small role in the journey of a startup company where we can. 

What contributes to the success of many founders in our portfolio is focus and KPI-driven success. Having a clear vision for the future of the industry, how their solution will fit into that future, and exactly what metrics and core competencies can help them achieve their milestones is both an art and a science, but in our experience leads to success. The future will never look as we think it will, so the ability to adapt and draft a new plan in the face of adversity is equally as important. 

• Flexitarian - Entovegan, flexitarian dog food, yup, guess that’s a thing.

• New look who dis? - Asda just got a makeover for its own-label pet food packaging, what are your thoughts?

• Calibra - The European brand launched treats that address common health issues in dogs.

• Soda for dogs - Craft soda company Jones Soda Co. just launched 3 new flavors.

• Ozonated Water - Can Ozone help eliminate salmonella in dog food?

• Fun to say - Sprankles For Pets launched its new line of freeze-dried raw toppers and treats.

• Lab-grown - The first ‘cultivated meat’ food for pets will hit UK shelves next year.

• Croc tails - are one of many exotic foods available at this unique pet store.

You reached the end, you deserve a treat 🍖

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Finally, What do llama’s say during the holiday season?

Fleece Navidad!

See you next week!

The Woof is a weekly newsletter dedicated to covering the pet industry.