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Startup Meowtel Makes Its Way to Profitability Despite Trouble from Dog-Focused VCs

techtost.comBy techtost.com9 June 202404 Mins Read
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Dogs are the most popular pet in the US: 65.1 million households have one, according to American Pet Products Association. But while cats aren’t far behind, with 46.5 million households with one, many innovations in the pet category have focused exclusively on dogs. And even though the service caters to both species, the focus is most obviously on dogs.

Sonya Petcavich, the founder of the cat app Meowtel, believes that cats and cats deserve more.

When Petcavich’s cat Lily died in 2015, he realized he might not have been the best cat mom. Petcavich traveled a lot for her sales job for Philip Morris and wasn’t home as much as she thought her elderly cat would need. She knew there were pet sitting services, but she didn’t think they did enough for feline friends.

“There needs to be a service specifically for people with cats. they have very different needs,” Petcavich told TechCrunch. “Rover had been around for a few years and Wag was picking up steam, but they were so focused on dogs. I said, “Fuck it, I’m going to be the crazy cat that does that.”

She took $100,000 of her own money, found a team of developers, and launched Meowtel in 2015. The startup is a marketplace for cat owners to find kitties, and only hires people who have direct experience with things like administering medication to cats (cats are special prone to chronic diseases as they grow older) and the care of cats with special needs. Prospective residents go through a rigorous six-step process before they are allowed to sign up for the app. This includes a 30 minute call with the Meowtel team to verify they are a real person, which other dating sites don’t do. Petkavitch joked that it’s easier to get into Harvard than to own a Meowtel.

The company has operated largely in stealth since its inception. Petcavich said the company has come out of stealth now only because over the past nine years, the team has put in the work, built its brand, and gotten the user experience where it wanted to be.

Meowtel is profitable and gross revenue from booking volume is up 50% year over year. The company has more than 2,200 sitters on the platform, some of whom have been with Meowtel all nine years. The company has completed more than 95,000 seat requests and has focused heavily on larger cities, including New York and Los Angeles. It is looking to expand its footprint in smaller cities as well.

Meowtel got to this point by raising just under $1 million in venture capital. Of that total, $500,000 came from angels, including Jason Calacanis’ Launch and Elizabeth Yin, general partner at Hustle Fund. Additional capital came from accelerator programs including Tech Wildcatters and Sputnik ATX. The company’s most recent funding was in 2020.

Petcavich said that gathering from VCs was difficult because the venture capital community is more dog-centric and many people didn’t understand why cats needed their own sitting service. Petcavich said that even still, he wanted to pursue venture funding for Meowtel because of its market-driven business model, which he believed made it a VC fit. Also, because of the capital-heavy nature of market businesses, he thought VC money made the most sense.

He’s right that there seem to be far more dog-focused venture-backed companies than cats. There are several startups that focus on areas such as the best dog food, accessories, and even health-focused ones. Butternut Box, a UK-based dog food company, has raised more than $466 million in VC funding. ImpriMed, a canine oncology startup, raised $23 million in November, and Fi, a smart dog collar, has raised more than $40 million in venture capital.

As for cats, they are noticeably fewer. Fresh pet food company Smalls is one of the few venture-backed companies in the category. The raised $19 million last year, and founder Matthew Michaelson told TechCrunch’s Christine Hall that he also believes innovation in the pet category has been heavily focused on dogs.

But does the market really need or have the potential to support a cat-only sitting service? Petcavich says yes, and her company’s success thus far and growth trajectory seem to back it up.

“In the age of 2020, there’s a brand that appeals to every specific type of audience there is,” Petcavich said. “These genres are different, but no one makes that distinction. I think it’s the psychology of the cat owner, the medical needs of the cat itself, that really opened up that blue ocean.”

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