drools funding: L Catterton pumps $60 million into pet food maker Drools at $600 million valuation

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L Catterton, a private equity fund backed by Paris-based luxury products giant Moët Hennessy Louis Vuitton, commonly known as LVMH, has invested about $60 million in Drools Pet Food, a Bengaluru-based company.

The deal values the 2010-founded pet food maker at $600 million, the company said in a statement.

What the money will be used for
The funding will be used to enhance the company’s existing manufacturing capabilities, meet the growing demand for high-quality pet food products, accelerate its retail plan, bolster the marketing budget, and attract top talent, per the statement.

“With the support of our new partner, we will strengthen our production capabilities, expand our retail footprint, and invest in strategic marketing initiatives,” Shashank Sinha, CEO and veterinarian at Drools Pet Food, said in the statement.

Founded by Fahim Sultan in 2010, Drools Pet Food’s products are sold in India through 34,000 retail outlets. The company also exports its products to over 22 countries, including Australia, Israel, and the United Arab Emirates.

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The company plans to enter Russia by 2023 and the United States eventually, the statement noted. The company has a dedicated sales force of 1,800 employees in its 3,400 headcount.

Billion-dollar opportunity
According to a separate statement issued by L Catterton on the investment, India’s pet food market is expected to grow by about 20% annually over the next five years to reach over $1.2 billion in 2028 on the back of increasing pet adoption, as the country becomes more urbanised and household sizes become smaller.

“Macro trends such as rising income levels and the increasing humanisation of pets are also leading pet owners to spend more on their pets, especially on buying packaged food instead of preparing home-cooked meals,” the statement said.

Drools’ portfolio comprises dog and cat food brands such as Drools, Pure Pet, Meat Up, Canine Creek and Kitty Yum. The company operates three manufacturing facilities and a warehouse facility spanning a consolidated area of 8-lakh square feet. The infrastructure allows it to offer 650 stock keeping units.

“This partnership will unlock a new phase of growth as India’s developing pet market matures across metros, as well as Tier 1 and Tier 2 cities… L Catterton’s expertise and ability to create value for companies in the pet food sector is well known across the industry. We are keen to leverage its consumer insights, operating knowhow, as well as commercial network to further strengthen our brands and recruit talent as we see many years of secular growth ahead,” Sultan said in the statement.

A prolific investor in India
L Catterton’s current and past investments in the pet food sector across the world include Butternut Box, Canidae, Inspired Pet Nutrition, Instinct, JustFoodForDogs, Lily’s Kitchen, Old Mother Hubbard, Partner Pet, Petlove, Pure & Natural, and Rachael Ray Nutrish.

Founded in 1989, the firm has made over 250 consumer brand investments. Its team consists of over 200 investment and operating professionals across 17 offices. L Catterton’s other India investments include FabIndia and Sugar Cosmetics.

Managing about $33 billion of equity capital across its private equity, credit, and real estate investments, L Catterton considers India a high-priority market and ranks it above several other markets in Asia, Anjana Sasidharan, its partner in the region, had told ET in an interview last year.

The fund was among the first set of investors to pump in money when Mukesh Ambani raised Rs 1.27 lakh crore in Reliance Jio platforms in the middle of the Covid pandemic. It is looking to invest $20-150 million across a range of sectors, including beauty and personal care, edtech, health and wellness, packaged food and beverages, and pet care, Sasidharan had said in June 2022.

“What truly differentiates Drools is its ability to manufacture products across the price ladder and make them available to pet parents via every relevant channel, be it online on Amazon or Flipkart, or offline in over 34,000 points of sale spanning speciality vet shops, veterinary clinics, and general trade stores,” Sasidharan said in Tuesday’s statement.

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