One of the knocks on the Philadelphia region's start-up scene is that it hasn’t birthed many big exit deals – young businesses originating here, then being acquired. Yet Wayne-based serial entrepreneur Brock Weatherup has now accomplished two.
His latest, to be announced Tuesday, is the sale of PetCoach to mega-pet-specialty retailer Petco, a privately held company based in San Diego. PetCoach, launched in 2014, developed an app to help pet owners better care for their pets, connecting them with veterinarians and providing personalized answers to their questions.
How much Petco is paying for PetCoach was not disclosed. The acquisition is actually the start-up’s second. Weatherup, its chief executive, bought it in July from founder David Martin, a native of Madrid, who stayed with the company as chief digital officer.
“It’s highly, highly unexpected and great,” Weatherup said of Petco’s purchase of PetCoach. Talks began in January, he said, so the deal was at warp speed compared with the nine months it took Weatherup to close his first Philadelphia-area exit deal: the sale of Pet360.com to PetSmart for $160 million in fall 2014.
“We are also proud to generate such a quick and successful exit, especially because we did it in Philly,” said Weatherup, who has served for 18 months as volunteer president of Philly Startup Leaders, a support group for early-stage companies.
Though the PetCoach deal is “dramatically smaller in terms of absolute dollars” than the PetSmart transaction, “from a pure perspective of investor rate of return, it’s much greater,” Weatherup said.
But Petco's gain is Philadelphia's loss. Weatherup is relocating to California as Petco’s executive vice president of strategic innovation and digital experience. Of PetCoach’s 10 other full-time staff – located around Philadelphia and in Spain, Mexico, and Brazil – four also will be moving to the San Diego area to work at Petco, Weatherup said. His job will be to help a larger company behave more entrepreneurially by, for instance, adapting to changes in consumer demands and being willing to fail in the pursuit of greater successes.
Weatherup found a receptive audience in Brad Weston, CEO of Petco. Founded in 1965, the company has more than 1,500 stores in the United States and Mexico, plus more than 10,000 pet-related products, and offers a variety of services, including grooming, training and vaccinations.
“As we continue evolving our value proposition — helping pet owners wherever and however they want to improve the health and well-being of their pet — we believe that an entrepreneurial and digital leader of Brock’s caliber will help Petco exceed the ever-changing digital expectations of the modern pet parent,” Weston said.
Weatherup said he first met Weston eight or nine years ago, when Weatherup was cofounder and CEO of Fathead, producer of life-size, predominantly sports-related vinyl wall graphics, and Weston was head of merchandising at Dick’s Sporting Goods. Dick’s was Fathead’s first retail partner after Weatherup established a consumer base through website sales.
PetCoach.co has 150,000 unique visitors and answers more than 12,000 questions each month, Weatherup said. In an Inquirer article about PetCoach earlier this year, Weatherup said his ultimate goal was “to transform the pet-health industry.”
PetCoach had been enrolled in a Dreamit accelerator in Austin, Texas, and Weatherup, CEO of Pet360 at the time, met Martin, its founder, through a mutual contact. When PetCoach left Dreamit, Weatherup recruited it to Plymouth Meeting, providing insight on the pet industry to what was then a mostly technology-oriented start-up.
A 45-year-old father of two daughters, one in sixth grade and the other in eighth, Weatherup said he will “go back and forth” between his home in Wayne and San Diego for the duration of the school year before relocating to California.
“While I will be very sad to leave Philly, I feel proud in the belief that I hopefully had some impact on the start-up community and was some small part of leaving it better than when I moved here eight years ago,” said Weatherup, a native of Connecticut who has lived in a variety of places throughout the United States and overseas, and is on the board of the Adirondack chapter of the Nature Conservancy.
He said Philly Startup Leaders has identified “several great candidates” to replace him as president, and that a selection is expected in about two weeks.
PetCoach’s evolution from concept to something Petco determined it had to have was the result of “having great local support in terms of talent, early stage-seed investors like Comcast Ventures, Dreamit and a bunch of local angel investors,” Weatherup said.
Of $2 million in seed funding raised in August, 90 percent was from Philadelphia-based venture funds and angel investors, he said. Among the investors was Jonathan Zabusky, former president of GrubHub and formerly head of Seamless, an Aramark spinoff.
"This is a significant win for Philadelphia," Zabusky said of Petco's purchase of PetCoach. "It continues to validate Philadelphia as a market where smart minds are attracted to, venture capitalists are willing to put money in, and we're on the radar of acquirers. ... I think it's going to lead to greater marketplace liquidity over time."