Mad Paws revenue more than triples as ‘network effect’ takes hold

Mad Paws revenue more than triples as ‘network effect’ takes hold

Listed pet services company Mad Paws (ASX: MPA) has seen its revenue surge by 244 per cent in FY22 to nearly $10 million, with the company attributing the growth to its consolidation of the sector.

What was once a pet sitting app is now a holistic pet brand, offering a variety of goods and services including food & nutrition, pet insurance, health services, and animal entertainment products.

The effect of acquisitions made since the company listed in March 2021 has led to a rapid increase in group revenue, however costs ultimately resulted in a $10.3 million loss attributable to shareholders.

The Sydney-based company, founded by Top 100 Young Entrepreneur lister Alexis Soulopoulos, says it benefits from a ‘powerful network effect’ as the result of bundling its pet sitting brand alongside animal health platform Pet Chemist, food brand Dinner Bowl, toys brand Waggly and dog bed company Sash.

“Advocacy and customer demand for existing and new products and services continue to gain business traction reducing the amount of effort and marketing spend over time,” says Mad Paws in an investor presentation.

“Mad Paws is already providing products and services in most categories. Mad Paws can play a role throughout the pet life cycle, leveraging its trusted positioning, expanding data set and love of pets.

“[This is] ultimately leading to greater loyalty, repeat rates and a larger share of wallet for Mad Paws.”

As far as FY22 highlights go, the company points to the $25 million acquisition of Tweed Heads-based Pet Chemist, which gave it a foothold in the pet medication and pet healthcare products space.

Further, bookings were up 101 per cent during the financial year, while gross merchandise volume (GMV) more than doubled to hit $27.1 million.

E-commerce and subscription revenues also grew by a whopping 1,222 per cent to $6.3 million - an increase of $5.8 million compared to FY21.

“This is as a result of the full year contribution from the Waggly acquisition, the acquisition of Sash Beds and the contribution of the Pet Chemist acquisition from 1 April 2022,” Mad Paws says.

“In addition, we saw organic growth from these acquisitions well above their performance pre-acquisition which is a reflection of our cross-selling efforts and marketing excellence.”

Mad Paws says it has entered FY23 as “a very different company compared to FY22”, and says it is at a much larger scale and more efficient too.

The business says that GMV exceeded expectations during the first eight weeks of FY23, and positive momentum for its e-commerce business in the fourth quarter has continue to improve, with Q1 FY23 operating revenue trending 15-19 per cent up on the prior quarter.

To further benefit from its raft of brands, Mad Paws says it is going to consolidate the different verticals under one name - Mad Paws - and housed under one product ecosystem.

Shares in MPA are up 8.33 per cent to $0.13 per share at 10.30am AEST.

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