The pet care industry has boomed over the past several years. From Chewy's IPO to the various veterinarian startups that have sprung up, VC money (and consumer cash) is flowing into the space.
Wagmo is no different. The pet insurance and perks startup has closed on a $12.5 million Series A financing, led by Revolution Ventures with participation from Female Founders Fund, Clocktower Technology Ventures, and Vestigo Ventures. Angels, including Jeffrey Katzenberg, Jim Grube, Marilyn Hirsch, David Ronick, and Michael Akkerman, also participated in the round.
The company was founded by Christie Horvath and Ali Foxworth, who both came from the world of finance and insurance and realized the gap in the market when it comes to pet insurance. Most pet insurance providers cover the big emergencies, such as surgeries, broken bones, etc. But anyone with a pet, and especially a new puppy (like myself), knows that the costs of basic care can add up very quickly.
Wagmo offers the same basic coverage as your usual pet insurance, but also offers a wellness service. The Wellness Program reimburses pet parents for the more basic stuff, like vaccinations, grooming, regular vet visits, fecal tests, and bloodwork.
Users simply pay anywhere between $20/month and $59/month and submit photos of their receipts in the app. Wagmo then reimburses what's covered via Venmo, PayPal, or direct deposit within 24 hours.
The premise here is two-fold. A healthy dog, who has access to all the basics listed above, is less likely to have major issues later on. The second piece is that the earliest costs associated with owning a dog are these basic ones, like vaccinations, vet visits, fecal tests and grooming.
Wagmo offers the wellness plan without an insurance plan. That means that users can onboard to the platform with what they need first, and upgrade to an insurance plan later on.
Wagmo generates revenue through both the wellness and insurance plan, but is actively looking into an enterprise model, as well, signing on larger organizations as part of their benefits package to employees.
The now-14-person team has onboarded thousands of users, with 20 percent user growth month over month since the beginning of the pandemic, and has processed 30,000 wellness claims.
The team is 58 percent female identifying, with Black, Asian and Latinx each making up 17 percent of the workforce.
"The greatest challenge is figuring out how to break down the opportunity ahead of us, particularly in the employer benefit space," said Horvath. "What keeps us up at night is thinking about where to start, what to prioritize, how to allocate limited resources and limited time."