Some people walk dogs out of love, or duty, or because their parents make them. And enough people now do it for money that dog-walking is at the core of a business worth $1.35 billion.
That’s the enterprise value of Rover, an app that connects pet owners with dog walkers and groomers, after it goes public via a special purpose acquisition company, or SPAC, according to a statement announcing the company’s plans. Nebula Caravel Acquisition—a SPAC created by True Wind Capital, a private equity firm—will acquire Rover, which will retain its management team and get an infusion of fresh capital. The new company, which will be renamed Rover Group and trade as ROVR on the Nasdaq, will be worth $1.6 billion in total.
The development represents the meeting of two trends in American business: the rise of the SPAC as a means of raising capital, and the rapid growth of the pet industry. SPACs act as blank checks for financiers who raise money through initial public offerings on public stock markets, then use the proceeds to acquire promising companies. Companies can use SPACs to avoid the hassles and uncertainty of a traditional IPO; they raised a record $80 billion last year.
It was perhaps inevitable that a SPAC would be deployed for a company devoted to pets, since venture capital and private equity firms have been gorging themselves on pet deals lately. The US pet care industry is estimated to be worth $100 billion a year and growing by about 4% to 5% annually. Driven by the changing relationship between pet owners and their companions, Americans are spending more on pet food, pet care, and veterinary services.
Rover is well positioned to take advantage of that dynamic. Founded in Seattle in 2011, the company says more than 2 million “pet parents” have used the service to book more than 500,000 dog walkers, groomers, and dog sitters in North America and Europe. After the deal, Rover will have $300 million in unrestricted cash it says it will use to expand into new markets and other pet types.