Rover Goes Public

August 11, 2021
Foundation Capital

We’re happy to share the news that another Foundation Capital company has debuted on the public market. Rover, the world’s largest online marketplace for pet care, is now trading on the Nasdaq under the ticker “ROVR”! This is a significant achievement for the company and a win for the pet parents and pet-care providers of the world. Kudos to Rover CEO Aaron Easterly and the entire Rover team for walking the rocky, unpredictable road it took to reach this point.

Foundation Capital joined the path to this milestone in 2013, when we led the Series B for DogVacay, which was founded a year earlier by its CEO Aaron Hirschhorn and his wife, Karine Nissim. The company was brought to our attention by Benchmark’s Bill Gurley, who led the Series A and was our co-investor in the B round. For Foundation, the investment sprang from our longstanding passion for finding and backing promising marketplaces. DogVacay was growing rapidly and expanding globally, adding more and more pet sitters and dog walkers to keep up with increasing demand. It was already breaking out of the pack (Beware of Dog Puns) as an early digital leader in connecting pet parents with pet caregivers.

We weren’t the only ones, however, to recognize that a massive business could be built in the $16-billion pet-services market. There was no shortage of competition in those days — and none more formidable than Rover. The two companies battled it out for several years. But the two Aarons, Dogvacay’s Aaron Hirschhorn and Rover’s Aaron Easterly, both cared deeply about making quality pet care accessible to everyone and building the most trusted brand in providing that service. They decided, in 2017, that the best way to realize their shared vision was to merge the two companies and combine their resources. Aaron E. was CEO of the newly enlarged entity, while General Partner Charles Moldow, who led Foundation’s investment in DogVacay, joined the Rover board.

Rover was now the undisputed top dog in the space. The business was growing nicely, raised its Series D at a unicorn valuation, and was preparing for an IPO when … along came a novel coronavirus. With much of the world working from home all day, every day, the initial months of the pandemic were a golden age for golden retrievers and a paradise for poodles. But for a pet-sitting and -walking business, it was a catastrophe. In a span of weeks, Rover lost 97% of its business, as pet owners were stranded in their own homes. The company was forced to lay off a large number of workers, cut product development, and cease international expansion, in an effort to ride out the indefinite storm with as low a burn as possible for as long as possible.

But through it all, Rover was captained steadily. What’s more, it picked up unexpected tailwinds. Pet adoptions rose significantly — nearly half of Americans, in fact, added a pet to their family over the last, lonelier year. At the same time, some less well-capitalized competitors ran out their nine lives and shuttered. As a result, the company not only weathered the storm, it emerged from it in an even stronger position. Once travel did resume at the end of 2020, demand for pet care came soaring back like a parrot out of purgatory.

In June of this year, Rover recorded its largest booking month ever — with total bookings of 421,000, compared to 373,000 in June 2019. It had its highest single month of Gross Bookings Value of $56.6 million. June 2021 was also the business’ largest-ever new customer month with new bookings of ~99,000, largely driven by organic customer acquisition. As a result of these strong booking trends, Rover raised its full year projections.

Not every event that touched the company in 2021 was a happy one, however. In late March, DogVacay cofounder Aaron Hirschhorn, was tragically killed in an accident in Miami Beach, at the age of 42. Aaron was an optimistic, sweet person, who loved his family and wanted to improve care for the pets we love like family. He would be proud of what Rover has achieved, as Karine and his three young children are surely proud of him. Sometimes entrepreneurs don’t get to see the future they helped build, but with Rover’s public-market debut, Aaron’s vision has been validated. We mourn our friend and celebrate his legacy.

Finally, we’d like to commend Rover’s management team. Thanks to their stewardship, Rover is more focused and has a bigger target market, fewer competitors, and a lower cost base. It was already the world’s largest network of pet sitters and dog walkers and has a market cap approaching $2 billion. With the company’s Nasdaq listing and the huge infusion of capital that comes with it, Rover will be even more dominant going forth. “This is the beginning,” says CEO, Aaron Easterly, “of what we believe could be a great period of value creation for Rover as we continue working to make it easier for pet parents around the world to connect with loving pet care.”

We are so excited for what comes next and want to give Team Rover one more round of a-paws: from the partners and pets of Foundation Capital…