Lyka Pet Food has today announced its second acquisition in the space of 10 months with the purchase of Sydney rival Happy Tales Kitchen for an undisclosed sum, while the development of a "Mergers & Acquisitions toolkit" makes no bones about plans to buy more businesses in the future.
Co-founded by former management consultant Anna Podolsky and integrative vet Dr Matthew Muir in 2018, Lyka has been cantering with four million bowls of "human-grade" meals with natural ingredients served up to thousands of "happy puppers" across Australia to date.
In April 2021 the company acquired Melbourne-based competitor The Wholesome Dog, and shortly after that raised $6.5 million in a Series A round that attracted investments from Wattle Hill Capital, Shearwater Capital and Afterwork Ventures, as well as Petbarn founder Paul Wilson and Pet Circle founding chairman Craig Blair as angel investors.
As of December, Pet Circle is now officially a unicorn following its $125 million Series C raise.
Lyka is not quite in that same dog park yet, but is planning a Series B raise in the coming months and has been growing steadily in a market that is also on the rise. Animal Medicines Australia (AMA) recently released its Pets and the Pandemic report, which estimates the Australian pet market grew to $30 billion in 2021, with $13 billion spent on food alone.
The report estimates the proportion of households with pets in Australia has risen from 61 per cent to 69 per cent in the two years since the pandemic began.
In terms of dogs, which is Lyka's primary market although Podolsky has indicated a willingness to diversify into other pet foods in the future, household dog ownership penetration has gone from 40 to 47 per cent.
Pet parents are also showing preferences for quality when it comes to the food they choose for the animals, boding well for Lyka in its mission to challenge the world of traditional, highly processed dog food options.
"With our shared passion for dog nutrition and pet wellness, we are so excited to be welcoming the Happy Tales Kitchen customers to the Lyka pack," says Podolsky, an Australia's Top 100 Young Entrepreneurs lister and Sydney Young Entrepreneur Awards finalist.
"For over two years now, Happy Tales Kitchen has been delivering fresh, high-quality, nutritionist-crafted meals to hungry pups around Australia, and we are so proud to be able to continue offering their passionate pet parents a varied selection of vet-formulated recipes that have been meticulously tried and tested.
"2022 is shaping up to be a huge year for Lyka and we can’t wait to extend our offering to the Happy Tales customers and help them to continue on their fresh food journey."
Podolsky highlights the development of a "Mergers & Acquisitions toolkit" that she says makes Lyka Pet Food "desirable partners to businesses looking to be acquired".
"The toolkit allows us to move faster and more efficiently during the acquisition, ensuring an easy and seamless process for businesses and customers alike."
Happy Tales Kitchen was founded by Johnny Gam, whose family has been in the food industry for more than 30 years, and he has worked alongside Robbie Brender and Nicole Katzman to bring the business to life.
Like Lyka, it is a dog food subscription service that has been built on a passion for pets and nutritious, wholesome food.
"We are pet-loving foodies, and are so pleased to be merging with Lyka. They are game changers and market leaders in what is an ever-growing space, and our shared values and mission to bring awareness and change to the dog food industry is so closely aligned," Gam says.
"I am extremely confident that our customers and their dogs are going to feel right at home with the Lyka pack."
Lyka's recpies have been formulated by Dr Muir alongside veterinary nutritionists. Each recipe contains a hand-selected mix of all-natural, human-grade, whole food ingredients that offer real benefits to dogs, with a proprietary algorithm applied to customers based on a dog's age, breed, weight, activity level and sensitivities.
“Without a doubt, dogs are at the heart of the family. With COVID puppies growing up and many Australians re-prioritising their lives post-lockdown, pet parents are changing their lifestyles as they re-socialise," Podolsky explains.
"And this means making healthier and more convenient choices when it comes to feeding their pups and keeping them happy and in tip-top shape. Thankfully, pet parents are continuing to go above and beyond since returning to their prepandemic lives, and are still thinking carefully about the food their pets eat and what’s going into their bowls.
"In the same way that we care about what we consume, pet owners are scrutinising ingredient lists and cooking processes more than ever, all whilst juggling full-time jobs, families and extracurricular activities, resulting in a huge rise in demand for nutritious, convenient food and transparency with a brand they can trust."
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