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BFD Expert Voices - Retail Deals

BFD Expert Voices

Ancestry, the Blackstone-owned online genealogical services provider, is dipping its toes (err, paws) into pet DNA testing with a new product, Kimberly writes.

Why it matters: The Lehi, Utah, DNA testing company is trying to take advantage of its edge in human DNA testing to win out over a crowded space of rivals.

The big picture: Spending on pet services is expected to rise 143% to $118 billion by 2030, spurring investment from strategics and private capital to jump on opportunities in pet care, according to Morgan Stanley research.

How it works: Ancestry's dog DNA test will work like its human test: An owner provides a swab from inside their dog's cheek and returns the sample to the company's labs.

Pet owners will be able to figure out the exact breakdown of their dog's pedigree, genetically match them with other dog DNA in its system, and determine certain behavioral and physical traits from their pet's genetic makeup.

The company didn't have to shift resources for this initiative because it had the talent and expertise internally, chief commercial officer Brian Donnelly says.

It was "a really interesting way for us to leverage capabilities and just bring a new product to the market."

What they're saying: "There's already a pet DNA testing market, we just haven't yet participated in it," Donnelly tells Axios.

He believes the company's dog DNA testing kit will be one of the most scientifically advanced in the market because of Ancestry's long history and expertise in the consumer DNA space.

Ancestry's test will analyze twice as much of a dog's genetic data as other tests, he adds.

Catch up fast: Blackstone acquired Ancestry from Silver Lake, Spectrum Equity and Permira for $4.7 billion, including debt, in December 2020.

State of play: Basepaws was acquired by animal health company Zoetis (NYSE: ZTS) last year, and Paw Print Genetics was acquired by Neogen (NAS: NEOG) for $11.4 million in 2021.

Within the venture ecosystem, Boston-based dog DNA startup Embark raised $75 million in Series B funding led by Softbank Group's Vision Fund 2.

EpiPaws, another pet DNA startup, was seeking to raise $200,000 in June, according to tech website Refresh Miami, to help it test pets' ages and how behaviors and the environment can change the way their genes work, an area of study known as epigenetics.

The bottom line: "We really view this as an extension of our core product as a company, which is all about family history and consumer genomics," Donnelly says.

Pet DNA testing: State of play

1 big thing: Ancestry launches pet DNA testing

Illustration of a cat with an x-ray view of its stomach revealing a dollar sign.

Birkenstock, the German sandal maker owned by L Catterton, filed for a U.S. IPO that Renaissance Capital estimates could raise around $750 million.

Why it matters: Birkenstock, which will list on the NYSE under ticker BIRK, is tapping the public markets at a crucial opening, following consumer-related IPOs Cava Group and Oddity Tech, Kimberly writes.

The move also comes on the heels of filings by marketing automation provider Klaviyo and grocery delivery company Instacart.

By the numbers: The company reports €40 million of net income on €644 million in revenue for the six months ending March 31, compared with a €73 million profit on €542 million in revenue for the year-earlier period.

The company had €172 million of cash as of March 31, and around €2.3 billion in debt.

Catch up quick: Goldman Sachs, JPMorgan Chase and Morgan Stanley are leading the offering for the 250-year-old sandal retailer.

L Catterton and the family investment company of billionaire Bernard Arnault acquired a majority stake in Birkenstock in 2021, valuing it at about €4 billion ($4.3 billion).

The intrigue: "The aggregate of known valuations of expansion-stage companies in the US that have not experienced a major exit is over $900 billion, with that valuation having occurred 18 to 24 months ago," according to a Deloitte report.

More than 2,000 companies that last raised expansion-stage financing from 18 to 24 months ago have an aggregate valuation of about $603 billion, per Deloitte.

For those that have last raised in the last 12 to 18 months, that tally is around $856.6 billion across 2,750 companies, Deloitte says.

🩴 1 fun thing: Birkenstock's sales got a boost from the blockbuster "Barbie" movie, with Margot Robbie sporting a pair in one scene. 

2. The BFD: Birkenstock files for IPO

Illustration of a foot stepping on to an orthotic made from money.

🤳 TikTok Shop is the latest effort by the social media company to further monetize its platform and its 150 million users.

Late last year our colleague Sara Fischer reported that TikTok, which is based in Singapore and Los Angeles, had plans to build its own fulfillment centers.

TikTok is partnering with CommentSold, which will provide the infrastructure, on live selling, Axios recently reported.

While CommentSold will charge platform fees, TikTok will charge transaction fees.

3. Retail therapy

Illustration of two speech bubbles in the shape of shopping bags.

Looking for a deal story? Search the Axios Pro Deals Tracker beta.

• H.I.G. Capital raised $6b for its fourth U.S. midmarket buyout fund. https://axios.link/44O0Xjp

• Sierra Ventures raised $265m for its 13th fund, focused on seed and Series A deals for B2B startups. www.sierraventures.com

• Buyandship, a Hong Kong-based e-commerce company, raised $10 million in Series B funding, led by Cool Japan Fund. https://axios.link/3PziI1y

• Poundland, a British discount retailer owned by Pepco (Warsaw: PCOP) agreed to buy 71 stores from Wilko, a bankrupt discount home goods retailer that previously agreed to sell 51 other stores to B&M (LSE: BMEB). https://axios.link/3Rf0rrD

🥃 GIC is considering selling its stake in Emperador, the world's largest brandy maker and owner of several scotch brands, per Bloomberg. https://axios.link/3LjKmgg

• Netcraft, a U.K.-based cybercrime detection company, announced it acquired Australian online brand protection provider FraudWatch International. https://axios.link/460dDom

4. Retail transactions

• Joel Gragg, former head of Stifel's tech capital business, has launched a new debt advisory and co-investment firm called Fitcapital. https://axios.link/48cAHC8

• Donald Young, formerly executive vice president of sales at Better Choice, was named chief revenue officer at Mid America Pet Food, based in Mount Pleasant, Texas. https://axios.link/3EyyAeq

• Olivier Bron, formerly CEO of Central Group's Central and Robinson department stores in Thailand, was named CEO of Bloomingdale's, succeeding Tony Spring, who will take over as CEO of Macy's. https://axios.link/45O0jUp

5. It's Personnel

Situational awareness: The Consumer Price Index rose 3.7% in the 12 months through August, up from 3.2% in July. It is one of the final inflation reports before the Federal Reserve's interest rate decision next week, Axios' Courtney Brown reports.

🍷 What we're drinking: Claire is back from a Napa trip, where she enjoyed a variety of wines, though Inglenook Vineyard's sauvignon blanc was a favorite.  

✏️ Many thanks to newsletter editor Claire Rychlewski and copy editor Brad Bonhall for today's edits.

September 13, 2023

1 big thing: Ancestry launches pet DNA testing