Access Menu

Log in via Social

Pet Hub Inc.

Pet Hub Inc.

Modern Pet Identification

Verify Investor Status to make a reservation

Deal Type

Equity

Funding Goal

$1,000,000

Current Reservations

$405,000

Minimum Reservation

$10,000

Maximum Reservation

$150,000

Deal Stage

Seed

Pre-money Valuation

$5,000,000

Open Date

04/16/2018

Closing Date

06/30/2018

Elevator Pitch

PetHub's data-rich digital ID tags are used by more than 128 communities. By Q4 2018, 967k new ID tags will be in circulation. We are raising money for ID tag purchases, operations and growth.

KPIs

171500 Users
6 Employees
$414,545 Sales

Company Overview

PetHub entered 128 U.S. communities in the past year as their new data-rich digital pet ID tags -- we're raising money to continue our fast growth

"We want a PetHub ID tag on every dog & cat to keep them out of shelters and we are already well on our way!"
-- Tom Arnold, Founder & CEO

PetHub is disrupting the pet identification tag space by providing modern ID tags to municipalities to replace their old stamped metal tags. These new IDs link to an online profile where critical data can be stored about the animal, including emergency contacts, dietary needs, medications & vaccinations, microchip and rabies tag numbers, and so much more. PetHub.com can even send GPS data to the owner and their emergency contacts when their animal is found.

"Now that we've built the platform and generated traffic to the site, we can launch so many things, most notably a marketplace to connect pet owners with pet businesses, help pet food & pharmaceuticals understand demographics based on anonymized data, and so much more."
-- Lorien Clemens, Vice President, Business Development

The Problem

Once a lost pet enters a shelter, their chances of getting home are dismal, according to the ASPCA:

  • Approximately 3.3 million dogs enter shelters annually in the US; only 620K dogs are returned to their families (18.8%)
  • It’s even worse for cats: of the 3.2 million cats in shelters, only 90K cats get home again (2.8%)
  • Annually, 1.5 million shelter animals are euthanized. The rest are adopted (rehomed) or placed in foster care situations
"... the average cost to a shelter once an animal enters their system is $200/animal ..."

The United States is home to over 89 million dogs, and more than 94 million cats, according to the 2017-2018 APPA National Pet Owners Survey, and the American Humane Association estimates that over 10 million pets are lost annually!

Based on PetHub's internal research with municipal clients, the average cost to a shelter once an animal enters their system is $200/animal (10 days to find the owner or re-adopt the animal at $20/day for food, medical needs, kennel, etc.).

PetHub's Solution

PetHub set out to make a modern pet ID: each PetHub digital ID tag includes a QR code, unique web address linked to an free online profile, a 24/7 Found Pet Hotline, and a suite of lost pet recovery software tools. Since 2010, PetHub has been helping lost pets get home fast (96% of PetHub recovered pets are home in 24 hours or less*) with our award-winning digital ID tags and powerful software tools.

98% of PetHub recovered pets are reunited with family without ever entering a shelter*.

(*based on internal statistics collected from 2012-2015).

6bc7a3cd8ba22071aa5f126c4d0e1e18.jpg


Traction

  • Sacramento, California, contracts to use PetHub digital tags as their pet license

    May, 2018
  • Nashville, Tennessee, begins sales & distribution of 80,000 PetHub.com digital ID tags to its pet owners for animal licensing

    May, 2018
  • Miami-Dade County renews PetHub contract purchasing 280,000 additional digital ID tags for September 2018 launch

    May, 2018
  • Q1 2018 - 549.5% increase in sales compared to Q1 2017

    April, 2018
  • PetHub added over 30k new pet profiles in Q1 2018 (with more municipalities on-boarding each month)

    March, 2018
  • More than 30 municipal purchasing contracts, representing over 40 municipalities & 500,000 pets in the last 18 months.

    February, 2018
  • More than 370,000 wholesale pet tags sold in 2017

    January, 2018
  • 4 of the top 10 largest cities in the US, and 2 of the top 10 counties use pet licenses "Powered by PetHub."

    December, 2017
  • First municipalities start offering PetHub IDs as their new license tags

    April, 2017
  • Major Pivot - PetHub changes focus from selling through retail to selling tags as license & rabies tags - Y2016 builds new sales pipeline

    January, 2016

Pitch Deck

Press Mentions

Key Customers & Partners

Miami-Dade Animal Services San Diego Humane Society San Antonio Animal Services Philadelphia Animal Care & Control Team Metro Nashville Animal Care & Control San Jose Animal Care Center

Testimonials

Virginia Diaz
Virginia Diaz
Compliance Chief, Miami-Dade County ACS
"Thank you so much for providing such an excellent service! "
Guy Eisenbrey
Guy Eisenbrey
City Enforcement Manager, Victorville, CA
"Citizens and employees like the look of the tag, its durability, and the prospect of returning more animals to their people in a timely manner."
Deneen Barnhill
Deneen Barnhill
Supervising ACS Officer, Yuba County, CA
"We are already getting low again and don’t want to run out. People are buying replacement tags for their other pets that already have current tags as well. The response has been great!"

Previous Funding

  • $358,653 Equity
  • Raise Source: Investors
  • July 2017
  • $825,000 Equity
  • Raise Source: Investors
  • October 2014
  • $450,000 Equity
  • Raise Source: Investors
  • October 2013
  • $1,309,000 Equity
  • Raise Source: Friends
  • February 2011

Frequently Asked Questions

Does Crowdfunder take a "cut" of your raise?

No. There is an up-front fee to help companies like PetHub connect with people looking for investment opportunities that speak to them. This is just a way to get ourselves introduced.

It looks like you have been at this for 7 years, what’s the story here?

Most municipalities won't work with companies under 5 years in business. Therefore, 2010-2015 we worked to enter the retail space. It was extremely expensive with a high customer acquisition cost. Right around our 5-year mark municipalities started to approach us because of our success rate in keeping animals from entering their shelter doors. That's when we realized we needed to focus 100% on municipalities. So, in January 2016, we pivoted.

Isn't a pivot like starting over?

Kind of. Our tech was already built and proven, plus our brand was already well-known with major industry awards to show we have solid recognition and traction. We just needed a new pipeline of customers who saw that working with a proven entity was an easy decision. Therefore, all of 2016 was spent building our pipeline with municipalities.

Why did it take all of 2016 to build a new pipeline?

Before our pivot, we confirmed that a municipality's buying cycle is typically once a year. 2016 was all about building those relationships, attending tradeshows, and speaking at workshops and conferences. We did well enough that in 2017 -- when we thought we'd win perhaps 6 key accounts -- we won more than 2 dozen (representing over 80 communities). Our 2018 pipeline has more than 40 new municipal contracts that we expect to close by year's end (2018), with another 40 already on track to closing soon after that in 2019 (and that list keeps growing). Our pivot was a game changer.

How does your business model work now that you've pivotted?

We sell our tags to municipalities in large orders as pet license IDs at a deep discount. When handing out a pet license or rabies tag, the pet owner is instructed to activate their tag at PetHub.com for additional benefits. The owner may optionally upgrade their free, Basic account to Premium subscription (recurring fee) for additional features and benefits.

How many people upgrade to Premium?

Of the users that sign-up at PetHub, more than 5% upgrade to the Premium subscription. We're adding more value with partner discounts and new features to further improve that upgrade rate.

What are your Premium prices and features?

Users may pay monthly, annually or a flat rate lifetime fee of $5/month, $39/year or $149/life. Premium features include instant alerts when their pet is found (by email, SMS and/or human phone call), GPS location based on data we pull from the mobile device that scanned the pet's ID tag, "Community Alert" where the animal's profile can be broadcast to shelters in a 50-mile radius of the animal's last-known location, exclusive partner discounts, and social media sharing of the pet's electronic lost pet poster.

Do people need any special software / mobile apps?

No. Our tags not only have a 24x7 call center phone number on them, they have a web address and unique ID that works with any browser. They can also be scanned using common software found in the app store (and Apple even has a scanner built into their latest iPhones that will automatically read our tags). No special software from PetHub is required. Anyone can help.

Who is your competition?

Companies offering the old fashioned stamped metal tags originally invented in the 1800s are the current standard. They provide an ID stamped on a tag, perhaps with a phone number to the municipality, and that's it. Our tags link to a free online profile, offer cool Premium features, and even provide a phone number to our free 24x7 call center (most municipalities can only answer their phones during business hours).

What about microchips - aren't they competition?

We don't see them as competition. They are an important safety net, actually. However, microchips require a trip to a vet or shelter (and not everyone is able or willing to do so). The longer an animal is lost, the more opportunity for injury. Our tags get 98% of animals found through our system home before entering the shelter system. Plus, with our tags linking to an online profile, the data can be updated for free at any time. Nearly half of all microchips have out-of-date contact information (or were never registered by the owner).

What about data security?

PetHub uses SSL (secure sockets layer - you know, that little padlock thingy your browser shows you on a secure website?) from the moment you arrive on PetHub.com to when you logout. Even someone scanning your pet's ID tag is receiving the data you choose to share about your pet over an encrypted connection. (For our more geeky friends: HSTS for Strict Transport Security)

Why are you raising money?

It's the age-old conundrum of fast growth. Given our success in closing municipal accounts, we need to front a lot of money in advance to purchase tags. Many tags are sold at or slightly below cost because the tags are our lead generation to bring people to our site. We start making our money as the municipality rolls out their new license tag program and users register and upgrade for Premium features. Many times this can take months before a program launches (and we have a lot of municipalities signing-up for our program).

Do you require a lot of warehouse space to store those tags?

At the end of the day, we are a software company. We generate the unique IDs that go into our database and work with our software platform. We then provide those IDs to our manufacturing partners as part of the creation of the physical ID tags. When ready, those tags are shipped directly to our client from the manufacturing partner. We rarely touch those tags ourselves. Instead, our clients (the municipalities and veterinarians selling them as pet licenses or rabies tags) handle the distribution through their existing programs and channels.

What does the future hold for PetHub?

That's the best part. New pets are coming onto the site faster than ever. We added 30,000 new pets in Q1 2018 and new municipal programs are launching their new PetHub tags each month, so it's continuing to grow quickly. Next-up: building a community & marketplace to help pet owners connect with pet service providers in a safe and secure way.

Any more fun or helpful videos to share about the PetHub solution?

Yes, this one from a PetHub fan who entered our video contest. (They won, of course! :-) -- https://www.youtube.com/watch?v=jgYqQix6mrU

Risks & Disclosures

The following is a list of “Risks” to be considered before investing in any company. All companies have risks, including well established companies, and PetHub is no exception. Please read the following risks below as well as the warnings provided on the Crowdfunder website under their “Terms” section. Investing in young companies can be very exciting and rewarding, but you need to go in with your eyes open and you need to do your own homework (i.e. “due diligence”). We here at PetHub look at investing akin to dating: you need to like the company and they need to like you back because you're both in the same boat as you work to build something of value. If your gut is giving you oogy feelings, hit the "next" button. If your gut is telling you there might be something here, then keep reading and be sure to reach out to us.

Risks

A list of risks could be exhaustive. The list of risks below are the ones that we, as PetHub, have at the forefront of our minds or have been asked about over time. We publish them here for your edification.

New Approach

Prior to PetHub’s 2016 pivot to municipalities, PetHub had a history of losses and limited revenue as it invested in entering the B2C consumer retail space. Although the revision of the business plan to use a new channel for on-boarding pet owners to the website (B2G2C) has proven substantially effective as their new approach to pet identification, it is inherently unproven. This risk is considered low, in PetHub’s executive team’s opinion, due to the fact that Q1 2017 (PetHub’s first year closing the deals that were started in 2016) PetHub’s ID tags entered 15 communities – and, 1-year later, the number of communities using PetHub tags reached 128 as of Q1 2018. In addition, on May 1, 2018, Miami-Dade County of Florida renewed their agreement with PetHub to use their tags in 2019 and agreed to purchase an additional 280,000 ID tags from PetHub.

Competition

While PetHub has competitors who also manufacture ID tags for the pet space, those competitors rely on the margins through the sales of their ID tags. PetHub sells its ID tags as a loss-leader and realizes its revenues through users upgrading to Premium, recurring subscriptions. The risk is that other companies will adopt this approach and work to catch-up to PetHub. While a risk, PetHub considers it a measured risk considering its large lead both in having built the technology, the fact that municipalities won’t work with start-up companies less than 5-years old, and the long lead time it takes to not only build relationships and close/win deals with municipalities, but the timing of municipalities’ periodic purchases of tags (typically per annum).

Intellectual Property

PetHub has filed provisional patents on its hardware, software and algorithms. However, those patents have not yet been taken to full patents due to the cost and available funds. However, because provisional patents have been filed, it removes the risk of a company claiming the same technology as their own. PetHub can also demonstrate its sales of its data-rich digital ID tags into other countries thereby establishing itself against non-U.S. patents should the company look to expand beyond North America.

Long Sale Cycle with Municipality Customer Base

PetHub sells its products primarily to municipalities and governments, which typically involve a long sales cycle. While this sales cycle works as a barrier to entry for future competitors -- and the two years of pipeline building has resulted in over 40 clients with 80 more projected to close within the next 12-18 months -- the sales cycle for any newly identified municipalities can be long.

Disclosures

The following are not necessarily risks, more about legal disclosures to help you as you evaluate if PetHub is an investment that fits your comfort zone.

Key Employee Relationship Status

Two of the Company’s key employees are married to each other: Thomas Arnold (Founder/CEO) and Lorien Clemens (Vice President of Marketing and Business Development).

Class of Stock Offered is "Preferred"

PetHub is issuing “Preferred Seed Series C” stock that is pari passu (translation: treated equally) with all previous preferred stock issuance. (Note: this isn’t a “risk” per se, just a disclosure. This is actually a very cool thing since the shares being offered are not “Common” – we are offering Preferred on Crowdfunder which means those shares get cashed out first ahead of Common stock when we reach a "liquidity event" such as a sale, acquisition, IPO, etc.).

Documents

Confidential

Loading...