If we focus on silver linings, the pandemic actually brought with it many good things. Think the pleasures of click and collect, the convenience of telehealth appointments and the digitisation of almost every business. Another positive born from the crappiness was the rise in pet ownership, as people found themselves home more and in need of companionship and cuddles.
If, like me, you chose to bring joy on four legs into your house during this time, chances are you doted on your snuggle muffin and spent countless hours selecting the best food, comfiest bed and most enriching toys to purchase. I mean, what else were we meant to do during lockdown?
Pet humanisation and premiumisation of services is driving a marked increase in spending on pet related goods and services. With the average annual household spend for dogs coming in at $3,237, pet services company Mad Paws (ASX: MPA) has reaped the benefits from many of the 69% of Australians who own pets.
With the aim to become the most trusted and convenient brand to rely on for all pet related needs, Mad Paws has diversified their service offering to expand their reach. What started as an online marketplace where pet owners can book services such as grooming, pet sitting and training, now encompasses multiple facets of pet ownership.
Dinner Bowl, Mad Paws’ gourmet subscription food brand, launched in Q1 2021 and continues to gain momentum and recurring revenue. Mad Paws also launched an insurance offering in Q3 2021. Later in Q4, the Company acquired subscription pet toy and treat box company Waggly Club, boosting the number of new customers. Their most recent business follows the acquisition of Sash Dog Beds, launching Mad Paws Home in Q2 FY22.
This most recent quarter has been productive for the Company with bookings on their platform up 81% (compared to Q2 FY21), and marketplace revenue has increased 63% to $1 million.
Operating revenue has skyrocketed by 199% to $2 million with new customer acquisition boosted 57% thanks to multiple acquisitions.
The Company rounded out the quarter with $8.9 million cash on hand to fund further growth.
With over 30.4 million pets in Australia and a total addressable market for dogs and cats at $30.3 billion, Mad Paws sees plenty of room to grow and further diversify their revenue streams with more complementary products and services.
The strategic focus for the year ahead is to further expand their flagship pet services marketplace and subscription offerings with a focus on cross- selling between business divisions. With pet health marked as a key focus for the year Mad Paws is looking to add more services within this vertical.
Justus Hammer, Co-Founder and CEO of Mad Paws said: “In our subscription verticals we have experienced accelerated growth over the last 12 months, through the launch of three dog food products and entering of the toys and treats market through the Waggly acquisition. During the quarter we commenced a number of operational initiatives to set these businesses up for scale and to drive margin improvements over the medium term.”
“2H FY22 has started positively despite operational challenges associated with COVID. We are focused on executing our vision to provide a broad range of pet services and products to make pet owners’ lives and, more importantly, their pets lives’ more enjoyable. In 2H we expect to broaden the product offering, increase GMV and continue to build our subscriber base.”
Samantha Freidin is a business journalist at Emerald Financial whilst also completing a Masters of Marketing and Digital Communications at Monash University.
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