Small Door Vet snags $40M for tech-forward platform

Small Door Vet clinched a $40 million Series B to expand its tech-forward membership vet care platform, the company tells Axios exclusively.

Why it matters: As auctions for traditional vet platforms stall, the fundraise validates the important of technology in the next generation of animal care.

Details: The raise, which CEO Josh Guttman says closed in June, was led by the chief investment officer of an unidentified publicly-traded private equity firm.

• C&S Family Capital and FS Investors also participated, alongside existing investors Toba Capital, Lerer Hippeau Ventures, Primary Venture Partners, and TriplePoint Capital.

What's next: As Small Door opens new clinics in Northeast markets, the company will start mulling a Series C in the second half of next year, Guttman says.

• In a startup environment that prioritizes profitability, Small Door is "fortunate in that our units have generated profits very quickly and our most mature units are generating gold-standard profit margins," Guttman says.

By the numbers: Small Door generates $10 million-plus in annual revenue, Guttman tells Axios.

• The company has five locations, with plans to open another five in the first half of next year in New York, Boston and Washington, D.C.

How it works: The company's membership model is designed to expedite the process for pet owners, helping them get seen more quickly than they might at a traditional vet, according to Guttman.

• Small Door provides in-person routine and emergency animal care, as well as 24-hour telemedicine care via mobile app — a feature used heavily, Guttman says.
• Members can purchase an "Access" plan, billing $12 monthly for dog-owners and $8 monthly for cat owners, or a "Premium Plus" plan, which is $89 monthly for dog-owners and $74 per month for cat-owners.
• Membership breaks down to 54% Access members and 46% Premium, Guttman says.

The big picture: Vet care has long been an area for roll-up M&A, but for now, Small Door will build its new clinics, versus buy, Guttman says.

• Small Door will be opportunistic on potential acquisitions, but a de-novo strategy lets Small Door "build modern units specified to our standards and acquire the right consumers of care," he says.
• "When you compare to the multiples driving the M&A market, de-novo has been more attractive," he adds.

Between the lines: A technology-embedded vet platform is "generally viewed better than being a consolidator and buying mom-and-pops" by the market, says one vet care banker.

State of play: A spate of self-described "tech-forward" veterinary startups have garnered significant funding in the last year.

• Two on Guttman's radar: West Coast membership-based platform Modern Animal and New York-based Veterinary Emergency Group (VEG).
• Modern Animal raised $75.5 million in July 2021, while VEG closed $100 million in financing in September 2021.
• Warburg Pincus injected $170 million into Bond Vet, a tech-powered urgent care startup not unlike a CityMD for pets, in October 2021.
• Vet startup Petfolk, which purports simplified access to health records and care teams, raised a $40 million Series A in August.

Our thought bubble: Beyond room for consolidation among emerging players (for instance, Small Door and Modern Animal, which offer similar models in different geographies), we may eventually see traditional pet care players sniff around tech-enabled providers.

Editor's note: The story was corrected to note that Small Door currently has five locations, not six.