Pet Circle keeps billion-dollar valuation after $75 million injection


Pooch supplying unicorn Pet Circle has kept its billion-dollar valuation with a $75-million capital injection from Prysm Capital.

Mike Frizell, CEO and Founder of Pet Circle, is speaking live at the Forbes Australia Leadership Forum. Secure your seat here.

The company that bills itself as Australia’s largest online pet retailer posted a loss of $31.8 million last year despite boosting revenue by more than $40 million to $308 million. It said it did not need the capital but took it when Prysm offered.

With a pet-supply industry estimated to be worth a about $12 billion annually, and growing, however,  the backers see plenty of upside.

The capital raising follows Pet Circle’s much larger $125-million Series C raising in 2021 – led by San Francisco-based Prysm – that launched it into the billion-dollar valuation stratosphere. It used that money to increase its range of products and start offering pet insurance. And it is mooted to be about to go into pet pharmaceuticals.

While other tech businesses have faced hardship with higher interest rates and the slowdown of easy money – most notably the failure of Milkrun which also relied on a tech platform to drive the delivery of bulky products – Pet Circle appears to have dodged the hardship.

Co-founder and CEO Mike Frizell said the healthy cash flow and continued growth in core business – particularly premium pet food, meant the outlook was for continued rapid growth.

“This investment boost is yet more confidence from our investors of the opportunity ahead for Pet Circle as we build an exceptional customer experience.”

Mike Frizell, Pet Circle CEO

Prysm Capital co-founder and partner Matt Roberts paid tribute to the company’s commitment to building its digital-first customer experience. “Under the leadership of Mike Frizell, they’ve emerged as a major player in a category that continues to see strong tailwinds globally. We look forward to continuing our partnership in the Company’s next phase of accelerated growth.”

Previous large investors in Pet Circle, including AirTree Ventures, TDM Growth Partners and the UK’s Baillie Gifford did not take part in this round.

 AirTree’s initial Series A investment in Pet Circle was now worth 35 times what they paid for it, partner James Cameron told the Australian Financial Review.  AirTree had not taken part in Pet Circle’s latest round because Prysm had initiated this raise and Pet Circle hadn’t needed more money, he said.

“Pet Circle was in a fortunate position where they weren’t looking to raise but had strong inbound interest. AirTree is one of Pet Circle’s largest external shareholders, and it already has one of the most significant positions across our funds, so there was no need to top up in this round.”

More from Forbes Australia