There are approximately 60M pet cats in the United States, comprising 26% of all US households owning a cat as a companion animal. Despite this massive popularity, much of the focus of the pet industry has been on dogs and most cat products for cats are just repurposed canine offerings. Smalls is a direct-to-consumer human-grade cat food brand designed specifically for cats and their loyal owners. The cat meals are tailored to a cat’s breed, size, and health goals and feature nutritious meals that are protein-rich, consisting of quality ingredients that are free of additives and fillers. The brand, launched in 2017, currently offers 16 different combinations of flavors and textures to cater to any cat’s palette, all focused on improving digestive health, promoting healthier cat weight, and preventing chronic diseases like diabetes, obesity, and heart disease. Smalls recently opened a new state-of-the-art production facility that increased its capacity 10x and plans to open its first Cat Café later this year.
AlleyWatch caught up with Smalls CEO and Cofounder Matt Michaelson to learn more about the business, the company’s strategic plans, latest round of funding, which brings the company’s total funding raised to $28M, and much, much more…
Who were your investors and how much did you raise?
Smalls announced a $19M funding round. This most recent round was led by Companion Fund with additional investors including Left Lane Capital, Valor Capital, 301 INC, General Mills’ venture capital arm, and Ohio State University’s endowment fund. Founder Collective is an additional investor from a previous round.
Tell us about the product or service that Smalls offers.
Smalls is the first-to-market DTC fresh cat-only food brand. We are changing the way people feed their cats with ultra-high protein, human-grade fresh food for healthier, more energetic cats. Cat parents can take a preference quiz to better inform cat habits and health concerns to find the perfect formulation and food offering – all delivered to your front door.
What inspired the start of Smalls?
Growing up, I had an entrepreneur dad and was just really attached to the idea of building my own business, too, but I wanted to start something that was positive and meaningful. I’m an animal lover and growing up with cats and dogs, I knew there was good to be done in the industry: Big Pet Food has long catered to dogs, leaving cats and cat health as an afterthought. Smalls was created as a cat-only brand to prioritize cat health catering to their specific needs. We’re dedicated to providing human-grade, sustainably-sourced food that is packed with high nutrients, without the additives and fillers.
How is Smalls different?
Unlike other pet food brands, we make fresh food specifically for cats. Historically, the pet food industry has catered to dogs, and really focused on dogs in a way that has left cats behind. We’ve perfected our recipe for feline nutritional needs and provide more than 16 flavors and textures to cater to even the pickiest of cat palettes.
What market does Smalls target and how big is it?
Smalls targets the more than 31.8M American homes that have cats. As pet parents increasingly invest in products to care for their pets in a way that mirrors how they would care for themselves or a child, Smalls delivers the healthy, nutritious offering cat parents can feel good about giving to their pet.
What’s your business model?
Smalls is currently direct to consumer, with plans to move into retail with this raise.
How are you preparing for a potential economic slowdown?
Pet food is a category that is proving to be recession-proof as the $106B pet industry continues unprecedented growth with expectations to surpass $277B by 2030. We’re fortunate to be in a category that’s so resilient.
What was the funding process like?
As with every round, the process was slightly different from the last with an increasing focus on the results of our work and the financials.
What are the biggest challenges that you faced while raising capital?
We still experience the culture bias towards cats first hand. It’s not uncommon for inventors to decline to even talk to us because we’re focused on cats which they “just don’t get.” We even had one person say “do cat people care about cats the way that dog parents do?” We see this bias as our opportunity, but sadly, also a reason why innovation for cats has lagged.
What factors about your business led your investors to write the check?
We’re bullish about being a cat-first brand. For over a century, the pet industry has catered to dogs – both legacy brands and DTC brands. We’re capitalizing as a market leader in the $106B industry solely dedicated to cats. Beyond that, we know our customers – we’ve retained 95% of customers year over year to feed more than 100,000 cats since launching in 2017. We’ve recently unlocked new growth by opening a new state-of-the-art kitchen increasing our production capacity by 10 times.
What are the milestones you plan to achieve in the next six months?
Smalls will leverage the new funds to continue to innovate our products and bring new varieties to our current offerings. As only 35% of pet parents’ wallet is food, we’re looking to expand beyond the bowl. We’re building a cat-only brand that provides cat parents a place where they feel comfortable, and are hoping to open a cat café in New York this fall.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Stay focused, spend wisely, and don’t lose the hustle that came with limited resources slip away.
Where do you see the company going now over the near term?
The new funding has helped us clarify our vision to profitability. We’re doubling sales year-over-year and are excited about what the future holds. Our team is growing – expanding headcount by more than 25% to continue to innovate and bring the best products to cat parents.
Where’s the best place to hold a team offsite in the city?
I’m a big believer in getting out into nature to create the space to focus on the people around you…so I’d say Upstate NY.