Deal Abstract

Managed marketplace for pet grooming. Generated $600k in revenue in 2018, bootstrapped all the way to current valuation of $6 million. Needs to scale up rapidly, but could become a platform for pet-care and expand in a low-regulation market to dozens of cities in the next few years.

Shout out to reader Max for forwarding me the deal!

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The 6 Calacanis Characteristics (91 161 18)

1. A startup that is based in SVNo: Yonkers, NY
2. Has at least 2 founders Yes: 2 (Each owns 37% of stock, one is CEO and the other is VP.)
3. Has product in the market Yes (4 star review with 50 ratings on iPhone App Store)
4. 6 months of continuous user growth or 6 months of revenue.Yes: 2019 revenue was $597k and 2020 revenue halfway through was 376k (if extrapolated to double is 752k)
5. Notable investors?No: mostly bootstrapped and debt financed!
6. Post-funding, will have 18 months of runway No: 2019 burn was $933k/yr, raising total of $1070k, so 13.76 months.

The 7 Thiel Questions (ETMPDDS)

  1. The Engineering question:
    • Good: this is a marketplace which is by definition a better UI/UX than individual providers.
  2. The Timing question
    • Uncertain: Not sure if it’s still true, but historically, pets is an extremely recession proof industry: link.
  3. The monopoly question
    • Good: one marketplace to rule all the pet groomers forever.
  4. The people question: 
    • Fine: Team seems fine, but not seeing anyone with marketplace. Zege has plenty of pet experience which is crucial.
  5. The distribution question
    • Good: Taking individual pet care locations and putting them on marketplaces.
  6. The durability question
    • Good: bulk insurance, network effects, booking systems and automation.
  7. *What is the hopeful secret?: 
    • Groomit can be the managed marketplace for pet care services. By validating the market then getting organizational wide advantages (bulk insurance for service providers, booking automation, texting reminders, etc.) they can unite a

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