Deal Abstract

https://wefunder.com/groomit

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)

CheckYes/No
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.


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