Top Deal: KetoNatural Pet Foods is Taking Pet Food to the Next Level

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Summary

At time of publication, June 13th, KetoNatural had raised $45.9K

Pet care and food has become a booming business in recent years. Case in point, dog boarding and walking service Rover recently closed a $155 million funding round that valued the startup at nearly $1 billion. This follows on the heels of competitor Wag, which recently garnered a $300 million capital infusion led by none other than mega-tech VC conglomerate Softbank. Just four months ago, in February 2018, it was announced that premium pet food market-leader Blue Buffalo was being bought out by General Mills for a staggering $8 billion.

The next iteration of this billion-dollar megatrend will be a follow-through of what has already begun: better and better care of our pets. It was probably inevitable that in a world where we are becoming increasingly focused on the quality and types of food we put into our bodies with each meal, that the same logic would be applied to pet foods.

Enter KetoNatural Pet Foods, a producer of protein-packed dry dog and cat food based on the ketogenic diet philosophy. We are becoming increasingly conscious as to what we put in our bodies, focusing on a mixed diet full of protein, fruits, and veggies all organically sourced. Why not apply the same logic to “man’s best friend? Ketogenic eating – derived from the natural process of ketosis which is what the body does when food intake is low – espouses the consumption of fats, meats, nuts, and berries and chides as opposed to cereals, rice, and especially that last donut in the office break room.

The Ketogenic philosophy has merit. It is likely no coincidence that the foods it recommends avoiding happen to produce a “sagging” feeling after a carbohydrate-packed meal.

The founder of KetoNatural, Daniel Schulof (known in industry circles as the “Dr. Atkins of the Pet World,” naturally applied this irrefutable logic to the care of ‘man’s best friend’ as well. After all, if you’re feeling good – wouldn’t you want the same protein-fueled strength embodied in the smallest members of our families as well?

At the front of the pack 

One doesn’t need to read KetoNatural’s pitch-deck (available viaWefunder) to know that premium pet food is an increasingly undeniable trend these days.

One cannot help but noticed the pet-aisles shelves exhibiting new-entrants to the $30 billion pet food industry (up from $~$20 billion in 2011): Blue Buffalo, Mars Pet Care, and Hill’s Pet Nutrition amongst others all vying for Fido’s (or more accurately his owner’s) attention.

And yet there is something “not quite right” with these options: they contain an estimate 5x (or more) the carbohydrate content of KetoNatural’s chicken meat-derived alternative. Put simply, there is competition but for those that want quality, protein-infused pet food there is nothing close on the market today.

This may not seem like a trivial point, but it is not. How would YOU feel if you ate dried cereal all day instead of quality meats, vegetables, and cheeses?

And so KetoNatural Pet Foods was born in April 2017. Its mission was simple: to produce a convenient pet food option that contained 75% fewer carbohydrates than other “grain-free” brands. After a successful Kickstarter campaign that raised $11,000, the team began gaining momentum. First with its chicken-based recipe soon to be followed up by a salmon-based recipe.

“KetoNatural is rethinking how we feed our pets. I look forward to seeing healthier, trimmer dogs in my practice.”-Dr. Willem Becker, Board-Certified Veterinary Surgeon

Founding investors include a veterinary surgeon, doctors, lawyers, and of course investors who believed in the product.

All of which not only see an opportunity to break into a $30 billion pet-food market (A market which is currently 90% carbohydrate-based).

A strong start to a compelling growth story

Even before it proved the ability to make what it promised pet owners, the company was able to raise a respectable $127,500. These funds went to building out the company’s products and getting operations up and running. Not only that, but it’s customer retention is sky-high for such a young product at 30%.

KetoNatural is going out of its way to keep investors and customers completely informed. Even going so far as to post their sales dashboard publicly for all to read:

Source: KetoNatural via WeFunder.

Looking ahead, the company has a huge runway of growth ahead of it. A review of its pitch-deck, business summary, and projected financials reveals an enterprise with a plan to reach $100 million in sales within five years. More interesting is the company’s valuation of $6 million. At that capitalization, the company will more-than-likely reward early investors should it come anywhere close to its goals. As the saying goes, “shoot for the stars and land on the moon.”

At its current valuation, investors are also buying an experienced management team that knows the pet industry. They have already built KetoNatural’s sister company, Varsity Pets, which grew to $1 million in revenue on a customer base of over 20,000. You can bet that the respect Varsity Pets already garners will lead to numerous synergies and mutually beneficial synergies for growth in the future.

What interested investors need to know 

KetoNatural is now in its second round of funding through Wefunder. Approximately $45,000 of its $107,000 goal has already been met thanks to the early-stage investments of 81 investors.

The proceeds from this round of funding will go towards working capital needs and inventory buildup.

Once funds have been raised, we think the team will be able to ramp up distribution as pet owners demand ever higher-quality pet food options, which should significantly increase revenue traction. We also think it’s reasonable to expect a decent return given the profits experienced by early investors in Blue Buffalo and Wag.

Bottom line: The pet food market is ripe for a premium, quality, protein-based pet food option and KetoNatural is the solution.