Dogdrop Raises $2.9 Million, Seeks to Be 'Gold Standard' in the Pet Startup World
Shaina Denny had just moved back to the United States from China when she decided she wanted a pup of her own. But as balancing work and home life became more difficult, she found herself looking for a dog service agency that allowed her to drop off her pet for just a few hours at a time— but couldn't find one.
One year later, Denny teamed up with COO and co-founder Greer Wilk in hopes of providing just such a service herself.
Dogdrop launched out of Science Inc., a startup studio in downtown Santa Monica that previously backed DogVacay, in January of 2020— right before the start of the COVID-19 pandemic.
The startup provides dog care with a twist: focusing dog care around convenience, flexibility and accessibility.
Denny said their dog service is unique in that it focuses on creating an industry "gold standard" for customer and pet experience.
"A high-quality member experience is something that humans expect from other services, they can also expect the same experience at a Dogdrop location," said Denny.
Dogdrop co-founders Greer Wilk (left) and Shaina Denny
At Dogdrop, pet owners can drop off their pups whenever they need to and pick them up whenever they are ready.
Dogdrop's customers pay an hourly rate or a monthly subscription. Costs start at $20 per month for three hours and range up to $800 per month for unlimited services.
The COVID-19 pandemic caused economic hardships for many startups and small businesses. Companies like Rover, one of Dogdrop's top competitors, were forced to lay off employees within weeks of the start of the pandemic. Rover laid off 41% of its workers at the end of 2020.
"If people are working from home and not traveling, the impact on our community of sitters and walkers is devastating," its CEO said in a statement last year.
But the American Pet Products Association reported that Americans spent almost $104 billion in 2020 on services such as grooming pet sitting and pet walking. This year the association estimates consumers will spend almost $110 billion on pet services — an increase of 5.7% over last year.
Denny said her company's biggest challenge was not economic, but keeping their employees safe and supporting them through rough times.
"As someone who adopted or got a dog during the pandemic— the demand was there. Especially because we focus on what we call 'quick stops.' People are able to drop their dog off for one to three hours at a time to get them exercising or to have a quiet Zoom call," Denny said. "The real challenge was just making sure our staff felt safe and supported during these times, especially with other difficulties going on in Los Angeles specifically."
Dogdrop announced a $2.9 million raise in late September. The Series A funding round was led by Fuel Capital and also included Mars PetCare, Muse Capital, Animal Capital, Gaingels, The Helm and Wag CEO Garrett Smallwood, the chief executive of one of their biggest competitors.
The company intends to use the new funding to expand its business reach and marketing efforts.
"The pet industry is really growing right now and a lot of investors are attracted to the pet industry space," Denny said. "If we can make it through and be successful during that time it shows investors we will continue to grow."
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Venture capitalists poured $384 million into ecommerce companies so far this year, according to PitchBook data, with more money being spent so far in 2021 than all of 2020.
In Los Angeles, where there has always been a healthy amount of ecommerce startups, there's an emerging new evolution with more innovation in the marketplace, investors say.
We asked the region's top VCs in our dot.LA sentiment survey to identify the top L.A.-based ecommerce companies. Here's what they told us, ordered by how often each was mentioned.
GOAT
Founded in 2015, GOAT has ascended the ranks of L.A.'s startup scene. GOAT hit unicorn status in late 2020, and just about doubled its valuation to $3.7 billion by June this year.
The marketplace platform lets shoe collectors sell and resell shoes and other luxury items. The company sold over $2 billion in merchandise in 2020.
Started by a pair of sneakerheads from UCLA, the company has become a leader in the rising industry of sneaker sales that is projected to rise from $2 billion in global worth to around $30 billion by 2030.
Tapcart
Founded in 2017, Santa Monica-based Tapcart is hoping to ride the wave of online and mobile ecommerce. Its software allows companies to transition Shopify-based stores into mobile apps, and boasts features that drive customer retention.
Tapcart raised $50 million in June. Founded by Eric Netsch and Sina Mobasser, apps created using the SaaS-based service processed over $1.2 billion in sales over the past year.
"The pandemic really just reassured the path that the world was already on," Netsch has told dot.LA. "We knew that mobile was taking the world by storm far before the pandemic happened."
Popshop Live
A sudden shift in pandemic-related restrictions lured companies to Popshop's livestreaming platform, allowing Popshop to reach a $100 million valuation by July.
Popshop's app allows stores to livestream from their websites and promote their product. Sales are made directly through the app. The company took inspiration from the Chinese market, where livestream vending platforms was successful, and is hoping the model translates to the U.S. market.
Petra Griffith, managing director of Wedbush Ventures, said she named Popshop Live as one of the most interesting ecommerce companies (that she does not invest in) because of its dynamic founder, Danielle Li.
"I think a lot about commerce and the future of commerce," she said. "You see the popularity in Asia, [where you] have influencers and video and live interaction, kind of like a live QVC that you can interact with is I think is really compelling."
Parachute
Launched in 2014 as an online-only, direct-to-consumer brand, Parachute began as a high-end bedding company. Since then it has expanded into other home goods products and has opened brick-and-mortar stores across the U.S., including one in Venice and another in Silver Lake.
Ariel Kaye, founder and CEO, launched Parachute's first mattress line in 2019, and the company has created a following among millennials with its bedding and bath linens made from high-quality materials.
Kaye said Parachute's home goods products fared "extremely well" during the pandemic as people spent money to "refresh" or redecorate their living spaces or moved into new homes.
"As a digitally native brand, we were able to meet our customers where they are. We have been very lucky to connect with new and existing customers to offer products as well as services designed to help them enjoy their home," Kaye said in an email.
Italic
Founded in 2018, Italic is a subscription based, direct-from-manufacturer company. The Los Angeles-based startup partners with manufacturers that work with big-name luxury brands to offer the same type of goods without the cost of branding.
CEO Jeremy Cai said he doesn't see Italic as a traditional ecommerce company because it takes nearly no inventory risk, but rather makes money when customers buy products, using that to pay the manufacturer and taking a cut of it. He said the business is more oriented toward technology, operations and product development, rather than sales and marketing.
"I think the excitement around our business is that we're fundamentally doing something different from a business standpoint and that we have pretty deep customer loyalty," Cai said.
While Italic is membership based, Cai said the company plans to allow customers who aren't members to make purchases later this year.
"In my mind, the future is really like a bifurcation of value-driven shopping and branded shopping," he said. "What we're mostly focused on is driving value on the product side to the customer."
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Voyage cut eight people from its roughly 60-person workforce last week, co-founder and CEO Rev Reddy confirmed to dot.LA. Besides COO Dave Link, the cuts affected the company’s full-time sales department and some contractors, he said.
“It’s unfortunate to let people go—it’s never a fun thing,” Reddy said. “This is a multi-factor decision, but of course the macro[economic] climate affected [and] was an input in this decision.”
Reddy added that the company hopes the downsizing will be temporary and that Voyage plans to eventually hire more staff, specifically people in the Los Angeles area who have expertise in digital marketing. “We are prioritizing growth efficiency over growth at all costs,” he said.
Voyage CEO Rev Reddy.Credit: Voyage SMSThe ongoing economic downturn has not spared the tech and venture capital sectors, spooking investors into pulling back funding and prompting a wave oflayoffs acrossthe industry. It’s a sudden change of winds of Voyage, which earlier this year raised a $10 million funding round and acquired rival SMS marketing startup LiveRecover. Voyage’s text-based marketing strategy is plugged into ecommerce platforms such as Shopify and ZenDesk—but as consumers have cut their discretionary spending to cope with rising inflation, they’re spending less on ecommerce, indirectly hindering Voyage’s business.
Link, Voyage’s outgoing COO, previously worked for LiveRecover and joined the company in February after the acquisition.
“Technically, [Link] wasn’t even an employee—it was a trial,” Reddy noted. “The title was internal and it was very much contingent upon execution of results. And candidly speaking, those results were just not hit.”
Link could not immediately be reached for comment. Other former Voyage employees confirmed on LinkedIn that they were laid off and looking for new work.
While Voyage is not yet profitable, Reddy said he believes the company is on a “path to profitability in a reasonable timeframe.” Still, he acknowledged that the startup’s backers—which include former Airbnb executive James Beshara and venture firms RiverPark and Guild Capital—will be eager to see progress if Voyage is to “attract the capital we need” moving forward.
“Limited partners now look at their portfolio and their allocations, and since the public markets have dropped so much, they look overweight in venture,” York IE managing partner Joe Raczka, whose New Hampshire-based investment firm is among Voyage’s investors, told dot.LA. “So they course-correct a little bit in terms of where their allocations are going, so you see some hesitancy.”
York IE Managing Partner Joe Raczka.
Credit: York IEStill, Raczka said York IE plans to stick with Voyage. “I think the company has a massive market that they play in [and] they have a really strong product,” he said. “I remain very confident in the business.”