Most people assume that the high point of my professional career came on April 18, 2017, when the owners of PetSmart paid $3.35 billion for Chewy.com, the pet retailer I had cofounded six years earlier. No doubt, that day was incredible. It represented the culmination of a dream and a tremendous amount of work. But believe it or not, another handshake—another deal—mattered even more to me.
That one happened on September 26, 2013. I had launched Chewy two years earlier with Michael Day, using our own cash and small loans, but my vision was to build a large business, and I knew that significant capital would be required to finance the growth. We approached dozens of VC firms—I even flew out to Silicon Valley from our South Florida headquarters and went door-to-door on Sand Hill Road explaining how Chewy would succeed by delighting customers and running an ultra-efficient operation. But everyone turned us down.
Larry Cheng at Volition Capital was one of the people we pitched our company to. We first met him in 2012; he was en route to Disney World with his family and agreed to make a quick stop at our office. I remember that he asked me, “Who’s going to take this company to $100 million in sales?” I was 26 and probably looked even younger, but I confidently answered, “I am.” He didn’t invest. Read More
Near the end of 2016, sales at PetSmart Inc. stores started sliding.
Executives at BC Partners, which had bought PetSmart in an $8 billion leveraged buyout in 2015, were scratching their heads. Operational improvements they made during their first year of ownership were so successful they had paid themselves a dividend. Why had same-store sales suddenly fallen over a period of only three weeks from flat to down almost 5%?
Anyone buying a retailer in 2015 knew Amazon.com Inc. tends to suck the air out of every category it enters. But the culprit turned out to be another fast-growing e-commerce company. Chewy Inc., CHWY -1.12%founded in 2011, was offering premium brands and effectively replicating the specialty pet store experience online. It had started running TV ads in June of 2016, and the resulting surge in its growth was biting into PetSmart’s sales. Read More
In his most recent letter to investors, David Einhorn of Greenlight Capital wrote that today’s market bears resemblance to the tech bubble of 2000. He then compared Chewy, the company I founded in 2011 and ran as CEO until last year, to the ill-fated Pets.com.
I am no stranger to the Pets.com comparison. I heard it when I first started the business and again from nearly every venture capital firm I spoke with on Sandhill Road in Silicon Valley. After building Chewy for 8 years with a talented and dedicated management team, upon reading Einhorn’s comments I felt compelled to defend the business we built. The comparison to Pets.com is not only off-base but it does a great disservice to all the hard work the incredible people at Chewy have done over the years to build the world’s largest online pet retailer with more than 11 million loyal customers. Read More
Ask any venture capitalist about the most important ingredient to success in startups, and they’ll tell you it’s founders who can persuade not only investors to part with their capital but, more importantly, who can convince people to leave what are often more stable jobs in order to help build their companies.
Ryan Cohen certainly fits the description. It goes a long way in explaining why Chewy, the online retailer of pet supplies that he co-founded in 2011, sold to PetSmart for a reported $3.35 billion in 2017 — and why it’s also expected to stage a successful IPO this Friday, when PetSmart spins it off (though PetSmart will continue to hold a majority stake in the company). Just today, the expected IPO price range, originally planned at between $17 and $19 per share, was raised to $19 to $21 per share, with the IPO advisory firm IPO Boutique saying the guidance it has received is that the deal is “multiple times oversubscribed.” Read More
Ryan Cohen may no longer be Chewy's CEO, but he will always be the guy who made it into a multibillion-dollar brand.
The 33-year-old entrepreneur co-founded the online pet supply store with Michael Day in 2011 and then sold it to PetSmart six years later for $3.5 billion, a deal billed as the largest e-commerce acquisition to date. Cohen stayed on as CEO until March last year--when he says it became clear to him that his work there was "complete." He had grown Chewy from $0 to more than $2.1 billion in sales and turned the company into a well-known brand among pet lovers. In 2018, the year he left, Chewy booked $3.5 billion in revenue, according to regulatory filings.
On Friday, Cohen watched the company hit a new milestone: PetSmart--Chewy's new owner--took the company public at an $8.7 billion valuation. Shares soared 63 percent on opening price, increasing Chewy's market cap to more than $14 billion. Like many other unicorn IPOs this year, Chewy is still unprofitable. It also has a dual-class stock structure that ensures PetSmart will retain about 99 percent of the voting rights after its IPO. Read More
What sets Chewy (CHWY) apart from its competitors? A little humanity.
Ryan Cohen, co-founder of the newly-public online pet-product retailer Chewy, said compassion goes a long way in the world of retail, and that’s what gives Chewy a leg up on Amazon (AMZN) and other e-commerce sites. Chewy prides itself on being there for pet lovers and creating experiences for them, according to Cohen who co-founded Chewy with Michael Day in 2011. Chewy, which offers products for dogs, cats, reptiles, birds and other pets, has 24-hour customer service and is known for sending customers surprise pet portraits as well as flowers when pets die.
“Our customers realize that we truly care,” Cohen said. “We care about them, and we care about their pet and we’re bringing a human element to e-commerce. And I think within this category that’s really important. Read More
Growing Chewy.com from zero revenues to a multibillion company and the largest acquisition in e-commerce history was an incredible ride, and Ryan Cohen, founder and CEO of Chewy, says he wouldn’t change a thing.
Cohen hasn’t done many interviews since the sale of Chewy last year for $3.3 billion to PetSmart. But earlier this year, he took the stage for a discussion with Greater Fort Lauderdale Alliance Vice President David Coddington at the Florida Venture Capital Conference in Fort Lauderdale, sharing advice and war stories with a couple hundred investors and entrepreneurs from around the state, and followed up with the Miami Herald.
The Dania Beach-based pet supplies retailer is a homegrown success story with 7,000 employees nationwide, and as Cohen relayed the Chewy story, the “surreal” and “mind-blowing” journey was anything but easy. Read More
In December 2012, desperately needing money to expand Chewy, his year-old pet-supply startup, Ryan Cohen traveled from Fort Lauderdale to Palo Alto and walked into a half-dozen venture capital firms on Sand Hill Road unannounced. He didn't get past the receptionists. Three months later he tried the same tactic again. "I'm relentless," says Cohen, a college dropout from Montreal. "It felt like it should work." It did not.
Yet four years later Chewy is one of the nation's largest and fastest-growing privately owned e-commerce companies, on track to book revenue of $900 million in 2016 and more than $1.5 billion in 2017. Relying on a customer-service strategy Cohen calls "Zappos on steroids," Chewy deploys 416 of its 3,400 staffers to answer phones and texts in round-the-clock shifts at the company's 70,000-square-foot headquarters in Dania, Florida. To ensure speedy delivery to his 3 million patrons, he has built three fulfillment centers, each the size of ten football fields, and has plans to open three more by early 2018. Read More
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