Under New Owners, Petco’s Digital Strategy Emerges in Petnet Deal

Petnet SmartFeeder (Petnet photo, used with permission)

Petco, the privately held pet supplies company based in San Diego, said today it led a $10 million Series A financing in Los Angeles-based Petnet, a three-year-old startup developing technology-enabled pet feeders and pet food delivery service.

The new funding will enable Petnet to expand its product line and sales and marketing capabilities. An existing investor, Los Angeles-based Aspiration Growth, joined in the round, along with unnamed investors.

The deal also reflects Petco’s expanding interests in technology following the company’s $4.6-billion acquisition (disclosed last November) by the private equity firm CVC Capital Partners and the Canada Pension Plan Investment Board. Petco also operates an administrative support center for finance, human resources, and other corporate functions in San Antonio, TX.

As part of today’s announcement, Petnet said its mobile-app enabled SmartBowl (priced at $49) is available online as of this week at Petco.com and at select Petco stores nationwide. The “SmartFeeder” ($149) is available at Amazon, BestBuy, Target, and Petco. In the statement, Petnet co-founder and CEO Carlos Herrera said, “We are pleased to partner with Petco to leverage their know-how and existing infrastructure to reach more pet owners across the U.S.”

The free Petnet mobile app enables pet owners to manage SmartFeeder feeding times, portion sizes, and food supply from their smartphone. The SmartBowl, introduced in January, helps pet owners measure food portions, and provides feeding guidance based on information that owners submit about their pets’ age, weight, activity level, and breed.

Petnet raised $4 million last October from Aspiration Growth, Black River Ventures, iRobot, and the Amazon Alexa Fund. Petnet said at the time that the funding was intended to expand its digital supply chain and bring its SmartBowl technology to market.

Including the latest round, Petnet has raised a total of $21.5 million and now has about 30 employees, according to a spokeswoman for the company. Petnet’s products are manufactured in China. The startup does its R&D and design in Los Angeles.

Petco has intensified its focus on its own digital retail strategy. In March, the multi-billion dollar chain named retail veteran Jodi Watson to head Petco Direct, where she has taken over omni-channel responsibility for the company’s e-commerce businesses, including the websites petco.com, unleashedbypetco.com, drsfostersmith.com, and liveaquaria.com.

Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.