If, like me, you’re old enough to remember the original Pets.com, then this funding story will make you smile. The iconic pet supplies online retailer, not to be confused with new owner PetSmart, sits alongside Boo.com and Webvan in Dot Com history. Folklore has it that Pets.com, which went from IPO to liquidation in 268 days, was selling its wares for one-third the price it paid for them, and that’s before taking into account the huge advertising spend. Oh, how things have changed…
Enter Petsy.mx, Mexico’s “premier petcare e-commerce retailer”. Hoping to make a land grab in the burgeoning Mexican e-commerce market, the young startup has announced a modest seed round. It’s raised $1 million, led by Venture Partners, with participation from Capital Invest, and Dila Capital, as well as unnamed angel investors. Money, Petsy says, that will be used to fund its growth and product development.
Launched in June 2013 with the aim of bringing “US-style” customer service to the Mexican e-commerce market, Petsy.mx sells a wide variety of pet care products, including premium dog and cat food brands such as Royal Canin, and Eukanuba. Like a lot of e-commerce activity in Mexico and the wider LatAm region, it looks to be gunning for something close to first-mover advantage.
“Mexican pet owners suffer from a lack of retail options, both brick and mortar and online, when seeking the best products for their pets,” says Toby Clarence-Smith, Petsy.mx’s co-founder, in a statement. “We want to solve this problem while offering fantastic customer service at all times. Our goal for Petsy.mx is to play a central role in the Mexican pet community, as both a partner and an advocate.”
E-commerce in Mexico seems to be quite a hot space right now, probably because its burgeoning nature means that, for the time being, competition is limited compared to maturer markets. In traditional e-commerce, timing is everything. Move too early, and the market is too small. Move too late, and incumbents make the barriers to entry that bit higher. To that end, Petsy is talking up an increase in the number of debit and credit cards in Mexico, and the government’s active role in supporting the Internet sector.
Of course, in emerging markets like Mexico, Rocket Internet, the hugely well-funded German e-commerce incubator, is the elephant in the room. As an example, Rocket’s ‘Amazon of Latin America’, Linio, picked up $50 million in funding last month from the likes of JP Morgan Asset Management, Investment AB Kinnevik, the Tengelmann Group, Summit Partners, and Rocket Internet itself.
Perhaps counteracting (or complementing) the Rocket effect, however, local startup activity more broadly is also on the increase. Initiatives like 500startups’ presence in the region, with its 500 Mexico City accelerator, are proof that the local startup scene is maturing. Meanwhile, VCs, such as Spain’s Seaya Ventures, are becoming a lot more bullish about the LatAm market, not least Mexico.