‘Pandemic puppies’ help fuel Rover’s comeback as pet-sitting startup preps to go public via SPAC

Inside Rover’s HQ in Seattle. (Rover Photo)

Pet adoption rates have surged amid the pandemic, and pet spending accelerated last year. Those are a few of the tailwinds driving optimism at Rover as the Seattle startup prepares to go public via a SPAC deal by the end of next month.

Unlike many tech companies, Rover saw its business plummet at the outset of the pandemic as demand for pet care decreased with the lack of travel and people working from home. It cut 41% of its workforce in March 2020, with executives also taking pay cuts.

Rover CEO Aaron Easterly. (Rover Photo)

But now the outlook is much sunnier for Rover, which has more than 500,000 caretakers on its platform. The company’s bookings and gross booking volume for March nearly bounced back to 2019 levels, according to data shared by Rover last month.

“There are very positive trends in the business,” said Rover CEO Aaron Easterly.

Those trends include:

  • Adding new users: The company is acquiring new customers at a higher rate compared to the equivalent 2019 period. “Part of that is a return to some level of normalcy, but the other part is the huge influx of new pet owners,” Easterly said. Rover cites data showing that U.S. pet adoption increased by 11 million or 35% in 2020.
  • Digital acceleration: The shift from offline-to-online across various industries has surged amid the pandemic, and that’s good news for Rover. Other tech companies in the pet industry such as Chewy have seen strong growth.
  • Record daycare use: Rover’s daytime services are setting new marks, which surprised Easterly as he didn’t expect workers to return to the office — and thus require dog walkers, etc. — until most of the population was vaccinated. One theory he proposed: owners and pets got used to being around each other all the time. “People’s relationship with leaving pets alone for six, eight hours has just changed, in terms of whether or not they feel comfortable with that or whether or not the dogs are even used to dealing with that,” Easterly said.
  • Travel uptick: As people feel ready to travel again, that will drive demand for Rover’s overnight services, which make up 68-to-75% of its business. Easterly also said that as people work from home more, they will end up traveling more.

Rover, long rumored as an IPO candidate, in February announced a deal with Nebula Caravel Acquisition Corp, a publicly-traded SPAC sponsored by True Wind Capital. The deal valued Rover at $1.35 billion.

SPAC mergers last year became popular alternatives to the traditional process for initial public offerings, offering a faster path to going public. Also known as “blank check” companies, SPACs typically do not have an established business and are used to raise funds via public offering for a future merger or acquisition by a specific deadline.

Pet sitting marketplace Rover grabs a bone, valued at $1.3 billion in latest SPAC deal

But the craze around SPACs has cooled in recent months. Part of the reason is a delay in completing SPAC deals due to a revised approval process from the SEC, The Information reported this week. Some companies are also seeing less cash than expected because SPAC shareholders can take back their money before voting on a deal; this can also result in slashed valuations. And the aftermarket performance of SPACs has fallen more than 20% in the past three months, according to IPOX SPAC Index.

Easterly said Rover knew that market or investor sentiment could shift when the company agreed to the SPAC deal. He still expects the merger to be completed.

“We want to capture more dollars on the balance sheet to invest in growing our business and take advantage of this unique opportunity in the pet industry,” Easterly said. “But at the same time our capital requirements are far less than the size of the deal. So we feel confident, regardless of the outcome.”

When the deal was announced, Rover said it would add approximately $325 million to its cash balance as part of a merger.

The company reported $48 million in revenue last year, down 49%, but projects $97 million for 2021 revenue and $201 million in 2022. Rover expects to be profitable by 2022, with $35 million in adjusted EBITDA.

Rover has raised $281 million in equity funding, including a $155 million funding round in 2018 that valued the company at a reported $970 million.

Rover moved into a new 75,000 square-foot headquarters in Seattle just before the pandemic hit. Easterly said the company plans to keep the space, but employees will have more options to work from home.

“We do expect to get back to the office,” he added. “We miss each other, and we miss each other’s dogs.”




I’d say if anything we’re more confident,

dogs got used to their owners been around 24 hours a day, and people’s relationship with leaving them alone for six hours, eight hours has just changed in terms of whether or not they feel comfortable that or whether or not the dogs are even used to dealing with that.

So we’re seeing strength across all service lines which was not our prediction, at this point in the vaccination or vaccine rollout.

So there’s very positive trends in the business.

still expect to close this quarter…

SEC a lot on plate

We knew that there is possibility that market sentiment on tech could shift the cyclical cyclical shift in investor sentiment. The amount of investors, playing kind of the destaque process could change. You know we knew all that going in and we still made the decision, we di

So we know we feel confident regardless of the outcome.

look at our plan for the full year, you know, give or take, they were expecting GMV to be roughly 2019 levels are GVV gross cooking value, and we’re expecting net revenue to be roughly 2019 net revenue. We expect net revenue to be a little bit ahead and GBB to be a little bit behind

We think it’s really good for us

So while our financial financial model doesn’t assume that these new pet owners will be more frequent travelers or they’ll be in more need of our services. We think that’s a possibility if not a likely

I also think that because our business is majority overnight care. And to the degree that people work from home more. You know we just think that it’s likely they’re going to travel more. 68, to 75% of our businesses overnight. So if people work from home more often we think that they probably travel more often. And so we think that’s probably a net positive

And so to the degree that there’s a pent up Pavel demand or people have gone on longer trips more frequently for some period of time that could be a big benefit, big benefit to our business as well. T

It’s like a in there, it’s likely that there are these three or four other benefits in terms of more frequent travel with the type of person who adopted during the pandemic and offline to online share games for us. You know that could be additional accelerant for the business.

think people are excited, and there have been people have been at rover for 5678 910 years. And you know, part of that trade off a new startup you allow people to come and take pay cuts, you know, make the company successful maybe they kind of receive that value back and then some. With regards to their ownership stake in the company. And so to the degree that our employees can start to receive some of the benefit for the value they created that’s wonderful and exciting, especially for those events coming to law

it’s not like, like oh we’re a mature company and now we’re trying to maximize operating margin, we’re, we’re far from that

So, we have a firm belief that there are so fundamental improvements to how the marketplace works

Additionally there are ancillary businesses, we’re excited about that. We also kind of had to put on pause in terms of those aspiration for a period of time.

We think that the human connection, both with other humans and with animals helps reinforce our mission. That being said, we also want to provide more flexibility to people in how they work toda

We miss each other. We miss each other’s dogs.


The Seattle-based pet-sitting startup is still on track to go public in the second quarter via a SPAC deal announced in February with Nebula Caravel Acquisition Corp, a publicly-traded SPAC sponsored by True Wind Capital.


disinterest in spacs



business bouncing back?

new lease



biz doing really well…on a new customer acq basis we are above the 2019 period, part of that return to some level of normalcy, other part is influx of new pet owners pandemic puppies. gained share during pandemic. big beneficiairy of that.

march gettin close comapre dto 2019 epec tot ocntiue to trend well. expectd q1 to be surprssed comign otu of holiday season, covid nunmbers, but we had a lto o condience in plan we put out this eyar to being with. if anythign more confient gone frmo high to very hih . also seen surprises in data. we set rover recrods for daycare. a little weird,

my metnal contruct ppl go travel when vaccinated, but woudln’t see offices rutrn to work until everone, fully vaccinted. daytime serices are doing well. tring to is that someo epople reurn to offices, weren’t previously, or our dogs got used to owners being around, and peope relatonship with leaving alone for 7 hours has changed. whether o not comoralbe or dogs a even used ot dealing with that. we see strength across all services liens not our rpediction at this poitn i nvaccne rollout.

overall good signs

more subtl ehings. avg length of trip is normalized. time between bookin gand when trip is, has normaized lengtehed during pandemic alot shoter duration trip book last min. just need to get out. now, summer vacaiton, plan holidays, and we see normalie that. that has accelerator on sales vs booking, avg order value ago a

very positive trends in business right now

which is very exciting to see.

georgrahpically, it’s not are differenecs. but we aseeing trends everywhere. not surprising. those states, areas wher epopuatl ndensity isn’t quite as high u see loosenign of behavior sooner than dense ubran areas.

states relax restrioctin sooner some gerogahi diferences all trrneding similar.



where we are wtih deal — expet up q2 . that hasn’t changed. some time in q2.

hugeh amount of tech companies and other companies goign public IPO or SPAC. SEC has a lto on plate rn. normally turn tem around, generally quickly, kind of at the mercy of that process so to speak.

within our range of expectaions but would have nejoyed it if things moving faster.

when we made this hoice we new posibity maket sentiment on tech shift, cycila shift on investor sentiment, amonut of investors playing despac process we knew it going in wsitl made diecison we did, as the pace of new SAPCs, tenring market slowed down yes, because of large amoutn fo spacs, m guess deals are comeptiive, ma mean they get priced colser to fair value at time agreemtn signed not muc of a pop,

but within range of what woudl be expetd trends over last 6 motnsh.

we excpte to close, because of ahrd decisons we made last yyear, we are not burngin a lto fo money. we want to capture more dolalrs on balacne shset to grow biz. take advantege of this unique pp pet indsutry. is imprtoatn but at same tiem our capital requrmeents are far less than the size of deal, we feel condient regadless of outocme.


plan for full eyar give or take, we excpte GMV 2019 roughyly 2019 levles net revenue to be roughly 2019 net revne,e xpct net revenu a it eahd gbv ahead an dbed

whe u do math full eyar eql to full year q1 lower, covid prevelace holidays. that means h2 is higher. we would excpte cross 2019 threashold, some time torward middl eof year, to degree that we crossing that. as year as march give us yar


we think godo for us , godo for pet comapnies.

if you onlien chewy oramzn, offlien to online transition was accelerated. more pet woners than ever benfeit. u get double win. in terms of pet wonerhsip and trainstiont o online.

our buisnessimliar, pet ownershp goes up overitme, thats good for our biz. look deeper. other itnerinting dyanmci fo rus. we dont know yet for usre. one question in financial model assumes, customer we acqure now look like custome rin ast. quite possiblethat if u  thskn about tpe fo erson wiat for pandemic , someoen who didn’t thinkt hey were home enough. financia lmodel doesn’ assume these new pet owner moreq freuqnet travelers, need of oruselves think it’s a possiblity, likelihood. that woudl be good for ourbiz

business is marjoiry overnight care, we dont assume huge shifts in ervei line mix, but my uess is if there are people doing remote work or wfh x days. week tha oculd help our busiessn , majorit yi sovernight, to degree work from home more, we think liekly travel more, more time u sepnd at homemore time u want ot leave, interesitng dynamic as well

also some pent up travel demand, financial model doesn’t assume. but look research travel bellweathehrs, peopl are planign to take longer trips and spend more on them. to the degree pent up ravel demand, ppl go longer trips more freuqntly big beneficiiaary to ourbiz. as well.

other dynamic, peope emotinal relathips with anmial, to waht degree fele comtoale alone 8 horus 10 hours, it’s quite psosible people prefences on taht has changed as well, we dont make assumption in fniancl pal,n our TAm ahs grown market share has grown, likely 3 4 benefits of more freuqnt travel, ith type of rpson who adopted, offoelin to line share gains, for us, could be a dditoinal aceleratfr biz.

if that were to happen ebnfit our business. the person who has daily dog walker, that decent amount of annual spend on dog walking. relativel mall potin of pet owning. higly conecnrtad on urban area, dont have yards.

factor on dpending how to look atit, 68 75 % of biz is overnight. if pplw ork from home we think they travel more often. and so we think prob a net positive. we’lls ee.


general optimisim. still scary stuff oging on in world, stuff deperesing. optimis with regard to biz. we are foturunt in sense that we hired really great ppl to beign with. if u going to go thru tough times rather than u want ot be aroud and itnreact with believ heart in right place , been forunate to have that.

jobsin past i dont know if go thru last year in those roles in companies. who you are with mater a lot. litle wait and se from employees what is this public thing mean be a public ocmpany. a way and see on that. people are excited. people been here 4 5 6 89 years. part of that. trade off startup come take pay cuts. company scucesful they receive that value back adn then some. rgard to wonership stake. to the degree employee receive beneefit of value they creatd that is ownrful and exciting. esp fo those been at ocmapny.


idk aday 1 day 2 4 5. we are single digitl pnerated target. not like we are mature comany. now we arytin ot maixmie operating margin. we are far from that. we are seeing more value to created. in enterprnsie thru growth than we do in near term profit. not to say we dont want ot be discplined we want ot be. but it’s till early. one of the trageidies of pandemic, from biz, certain invesmtnet areas we just knew we could make exp better for coustmers, if we built things into teh or dod differently, we weren’t ale to geto tit. we had to be cost conscious. we have a firm belief that there are sstil fundmatela imrpvoent marketpalce orks, value rop to sitter, dog walker, owner, that will be matieral , big mrvoemetn ro busienss. additonally, ancilairy biz we excited about we had to put on pause tose adpirations. altho are media business, did wll in pandemic, log did really well. we see opp to investin those area i more rnomalized period excpted that we have productive produt raodpm for years year.


resumse oem of itesms, delayed pause. stated to rll out tems product persecpitve announce we ecpt to roll

grooming in seond half of year , dififuclt thing to operate or try to rol out in apdnemic.

still have it, tryign to figure out new rowlr is not easiet thing. we think the huamn connection othr humans and enaimlas reifnroce our mission that beign sadi anw atto rpvoide fleixlity. how they work. today. we do ecpt to go back to ofice. we think first to anoucn we go rull reomte when pandemi chit in seattle. always prioritied employee well being not ai na jurry to get back. wait for approrpiate phase, even then, while before execptation. even once epecaiton we plan on having wfh days, but we do excpte to get back to office. we miss each other and we miss dogs, as far as tech ahs come, in term so fat home deliveries vdieo conf, someting gets missed. that something missed may be higher for som roles, some ppl put on ehadphones, be their best largely staring at comptuer screen but weexct to get back and bring dog back to office.


geogrpahic — we are excite ditnernaitonal biz as well. very different dynamics, with vacine rollout and ehsittiantcy iff parts of world. we are confident in eyar but last 14 motnhs taught us anything. prepare for some curveballs at some point. for offies outside of seattle, itnirnaotnal busiensses we hope that pandmeic gets under contrl sooner rather than later been sad to see in some counrties aroudn world, had done good job contiaing pandemic more recently.







other trends


back to normal?


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