Fresh funding gives cat food brand Smalls avenue into retail for the first time
The pet industry grew rapidly over the past three years as people, stuck at home during the pandemic, decided to add a furry friend to their families. Analysts say this industry, where spending was $118 billion in 2019, isn’t done with big growth and predict it will more than double by 2030 to $277 billion.
This category is very dog-dominated — dog owners spend, on average, $1,480 per year, while an average of $902 is spent annually by cat owners; therefore, there are a lot of dog-focused products, including food.
Some startups in the pet space have tried to give equal footing to both dogs and cats, for example, The Farmer’s Dog, which direct-to-consumer cat food brand Smalls co-founder and CEO Matt Michaelson says is a close competitor. However, there are relatively few that cater just to cats. Smalls is among a small group that includes Cat Person, Ziggy, Made by Nacho and KatKin.
“It became really clear that during the pandemic, adoption was skyrocketing,” Michaelson told TechCrunch. “Cat adoption really outpaced dog adoption, so we expected the category to heat up and that there would be more innovation at this point. However, we’re still really alone in bringing fresh food to the category and to cat parents. That was a surprise to us. We think there’s a continuing manifestation of the cultural bias against cats and toward dogs in the U.S.”
Five years and over four product introductions later, Michaelson and co-founder Calvin Bohn are guiding the company to take matters into its own hands and expand by opening a first-of-its-kind cat café and launching into retail, Michaelson said. This was buoyed by $19 million in Series B funding in a round that closed in mid-2022.
The company has now raised a total of $34 million, which includes a $9 million Series A that TechCrunch covered in 2020. Michaelson didn’t disclose valuation for the most recent round, but did call it an “up round.”
The Series B is led by existing investors Founder Collective, Companion Fund and Left Lane Capital and also includes new investors like Valor Capital, 301 INC, General Mills’ venture capital arm and The Ohio State University’s endowment fund.
In addition to the cat café, which will open in New York in the fall, and retail launch, the new capital enables Smalls to grow its headcount by 25%. The company has 50 people currently.
The brand has doubled year over year in both customers and revenue since 2017, growing to eight figures in sales to feed more than 100,000 cats. Amid all that growth, Smalls also has a path to profitability, Michaelson said.
“We are still a tiny sliver of a $12 billion category,” Michaelson said. “Anyone can advertise on TV or the subway, but only Smalls could open a cat café and it make sense. That’s one example of many things we want to do to build the brand. The other piece is continuing to invest in product innovation. Fresh food is a very fast-growing category, and we think there’s plenty of room in it, but we need to stay one step and two steps ahead of the category to continue to bring healthier food and healthier products to market.”
Fresh funding gives cat food brand Smalls avenue into retail for the first time by Christine Hall originally published on TechCrunch