Petlove unifies animal well being manufacturers and needs to “chew” R$ 500 million in 2025

In mid-2018, Petlove decided it needed to go beyond pet-friendly e-commerce. The idea was to be a one-stop-shop for the pet market and, in this direction, one of the most interesting verticals was veterinary health.

In recent months, Petlove has advanced in this area by incorporating customers from the pet health plans of Nofaro, a startup it purchased in March of this year, and Porto Seguro, as part of the agreement that made the insurance company the owner of 13.5 % of your operation.

With these portfolios, Petlove began to work to unify its businesses in the segment under a single umbrella. This Friday, October 7, the company presents the result of this effort, by officially presenting its new brand, called Petlove Saúde.

“We had e-commerce and hosting (with the merger with DogHero, in 2020). The health arm was missing, which was the main pain of pet owners”, says Fabiano Lima, responsible for running the Petlove health area, when NeoFeed. “We understood that we needed to enter this market.”

The new division already has 89,000 insured pets and expects to increase that number to 150,000 by the end of the year. According to Lima, this should result in a tenth of the total revenue that Petlove projects for 2022: between BRL 1.1 billion and BRL 1.2 billion – 50% more than that recorded in 2021.

In the long term, the projection is that the veterinary care division will reach revenue close to R$500 million in 2025, representing a 20% share of the business.

In practice, this Friday’s announcement will begin a process of gradual migration of users of the two health plan services to a single platform. The expectation is that all customers will be using the new application by the end of the year.

This platform will already adopt the visual identity of the new brand. In terms of functionality, the service will be built on top of the model already used by NoFaro. The difference is that it will bring some new features, such as different plan options.

Currently, the service offered by Nofaro offers two insurance options for animals, which cost R$49.90 and R$99.90 per month. The plans are differentiated by the coverage of expenses with consultations with specialists, cardiological exams, anesthesia and hospitalization.

Two new plans will be incorporated: the first, in the amount of R$ 159.90, will cover more complex exams and, the second, with a monthly cost of R$ 299.90, will also give access to the most reputable veterinary clinics. In both modalities, there will be the possibility of making appointments at home.

“This helps a lot even those who have less docile dogs or cats that don’t like to leave the house”, says Lima. The approach also favors preventive consultations. “The tutors only take the pet to the vet when it is sick. We have noticed that the use of those who have a plan is three times greater than those who provide private care.”

All this will be informed in an advertising piece that will be shown in prime time on Rede Globo. The broadcast is part of the agreement made in September that allowed Globo Ventures, the investment arm of the Marinho family, to become a shareholder in PetLove, which is valued at R$ 3.5 billion.

to get to this valuation and putting into practice its plan to become a one-stop-shop, Petlove had the support of important investors in the market. Since it was founded in 1999 by Marcio Waldman, the company has raised more than US$ 225 million in investments made by giants such as Softbank, Riverwood Capital, Monashees and L Catterton, in addition to Porto Seguro and Globo Ventures.

The arrival of these investors was essential for Petlove not only to bring in companies that operate animal health plans, but to invest in more technology for the vertical. In this sense, the company also acquired the startups Vet Smart, a systems management company for veterinary clinics, and Vetus, an ERP for petshops. You deals their values ​​were not revealed.

dog work

Petlove is eyeing a segment that is still in its infancy in Brazil. According to the company, which is based on figures from its services and competing companies, only 0.2% of pets in Brazil are covered by health plans. “It is a very incipient and underpenetrated market”, says Lima.

The Brazilian percentage is much lower than that recorded in the United States, where, last year, about 4 million dogs and cats (2.5% of the total) had health insurance. The data is part of a study by the American Pet Health Insurance Association, which estimates that the pet health insurance industry was worth $2.8 billion in 2021 in the US.

For Lima, there is potential for the Brazilian market to reach percentages of 3% to 4% and move more than R$ 1 billion. “The biggest challenge to grow is the knowledge of the population about the product”, he says.

The other hurdle involves supply. For the service to become popular, it is necessary to expand the network of accredited veterinary clinics. “Before, it was more difficult to have adhesion and the same happened with the health plan for humans and with the dental plans. Today that is changing”, says Lima.

Added to the Porto.Pet and NoFaro operations, Petlove currently has 1,600 accredited clinics and this number has been growing at a rate of 100 new units per month. To be able to serve 500,000 pets two years from now, the company estimates it will need about 3,500 clinics.

Petlove currently has 1,600 accredited clinics and this number has been growing at a rate of 100 new units per month

According to Lima, the plan is to prevent customers from having to travel more than 5 km to a unit. Even so, the expansion is being done in a staggered way. “If we have many accredited clinics and few clients, it will not work. And if it’s the other way around, we’re also going to have problems because the vets’ schedule will be compromised,” he says. “This sizing has to be done.”

For now, the service is already present in the states of São Paulo, Rio de Janeiro, Minas Gerais, Rio Grande do Sul, Paraná, in addition to the Federal District. In the last week, Petlove started the accreditation of its first clinics in the Northeast region, allowing the care of patients in Fortaleza.

Petlove also bets on the B2B segment, with agreements for companies to offer pet health insurance as a benefit to employees. Another focus is the conversion of users through promotions that range from providing free e-commerce shipping to policyholders to discounts on hosting through DogHero.

fierce competition

Petlove has two fierce rivals in the market. The first is Petz, which recorded revenues of BRL 2.5 billion in 2021 and is currently valued at BRL 4.9 billion.

Although focused on e-commerce, as it showed when it paid R$ 715 million to acquire the premium brand Zee.Dog, Petz has also put a foot (or paw) in the health market. In 2020, the company launched the veterinary clinic brand Seres, which currently has 153 units in 80 cities.

The Services and Others segment, which includes Seres, recorded revenue of R$ 33.2 million in the second quarter of this year. Petz’s total revenue for the period was R$ 749 million.

Cobasi is the other rival. Still privately held and with revenues of around R$ 2.1 billion per year, the company founded in 1984 has been investing in the diversification of its business by entering the service sector.

One of the moves in this direction was the acquisition of Pet Anjo, of lodging and walking services for dogs. The M&A was concluded in June last year, two months after the company raised R$300 million from Itaú Unibanco’s Kinea fund.

In health, Cobasi has since 2020 a partnership with the network of veterinary clinics SPet, which has 26 units located in the state of São Paulo and in cities such as Rio de Janeiro, Curitiba, Ponta Grossa, Maringá and Porto Alegre.

Source: Neofeed