Before I get started, I would like to let you know that I am holding stock at the time of posting and I expect that not to change for at least the medium or longer term unless I acquire more shares. As the comapny continues to grow its users, its revenue will grow and so too will its "household name" status; think of Kogan only 5 years ago, not many people would know it, now it's very well known by most households.
Mad Paws, ticker code (ASX: MPA), Australia's #1 Tech Enabled Pet Marketplace. Market capilisation fully diluted = $42,930,000 (318.49 million shares). Last price per share = $0.135. Gross merchant value (GMV) 2022 = $37.1 million. Operating revenue 2022 = $15.4 million. Net market capitilisation/GMV = 1x. Net market capitilisation/Revenue = 2.4x. Cash balance $5.6 million as at June 30th, 2022. (4/8/22 presentation). Major share holders, a/ institutional; Bombora (16.79%), SG Hiscock (5.13%), Prual Investments (4.2%), Qantas Investment Arm (1.7%), b/ company related holders; Howard Humpries, Pet Chemist founder (11%), Justus Hammer CEO (2.5%), Jan Pacas Founder (2.5%), Alexis Soulopoulos (<1%), other significant shareholders Beach Haus (1.5%), Fubus (1.5%).
About Mad Paws. Mad Paws runs a website and a mobile app that allows pet "parents" to easily book high quality and trusted pet carers for a short or long term period to take care of thier loved one if they need to go away on a short business trip or a liesurely holiday. Over 600,000 pet parents are registered on the Mad Paws platform in Australia with over 560,000 cumulative pet bookings having occurred since inception. Customers also exceed well over 264,000 with a 5-year compounding annual growth rate of 80%. However, Mad Paws doesn't just offer Pet Sitting either. From pet parents starting thier journey with a new pet right up to aged care for pets, Mad Paws has plenty to offer pet parents, from Sash Beds (curated e-commerce for pet products), Pet Chemist #1 Australian pet pharmacy (pet health care, prescription and OTC medication, and also pet foods, pet care), Mad Paws pet insurance and also Waggly (toys and treats subscription service). Mad Paws can play a pivotel role throughout the pet life cycle, leveraging its trusted positioning, expanding data set and love of Pet’s and pbeing a "one-stop shop". (4/8/22 presentation).
Pet Ownership Levels at All Time Highs (ATH). Pet ownership is the highest it has even been in Australia (not just becuase of the covid pandemic pet movement) and is continuing to grow with 70% of households with either a dog or a cat (well over 30,000,000 cats and dogs in Australia), or some other furry friend. A large part of pet ownership is also the "pet humanisation" factor where typically a pet dog is no longer left outside to sleep in the kennel but is part of the family, sleeps inside, eats only the best food, purified water (maybe) and pet parents are spending more on thier nutrition, care, pet products and services.
Recession proof, spending on pets to keep charging on. Given all of this "no fuss" expenditure by pet parents, naturally another argument for this sector is its recession reciliiance. And the spend rate will keep climbing currently around $3200 per dog and $2000 per cat, per year is spent by pet parents. The one major differentiator in this space (I believe) will be how tech empowers pet parents to be in control of the full service health and wellness of thier pet, from ordering pet supplies, vet visits, pharma, carers, etc, all under one roof. https://www.********/investing/2021/11/02/why-the-pet-industry-is-recession-proof/ https://www.geektime.com/pet-industry-tech/
Still a very fragmented industry in Australia. The industry is still very fragmented in Australia (and globally), with a lot of Mum and Dad set ups offering dog grooming, pet sitting, and other forms of care and maintenance for pets. Eventually all of these groups will eventually need to become part of a larger part of the industry via Mad Paws et al, and will create new jobs for people that never thought they had the resources to be able to get setup in the first place. Think about how many Uber drivers have been created since Uber launched (of these how many would have been taxi drivers??? probably not many). Mad Paws I think only has 3-4% of the current market, so addressable market potential is still quite huge, especially if they can target in upwards of 20-25% or more of the total market. This doesn't mean they are cutting down Mum and Dad operations, it means the Mum and Dad operations have joined Mad Paws and in exchange for a small slice, they have free marketing and more exposure to customers they otherwise woudn't have had operating solo. Think about how Real Estate.com created its dominance by working with real estate agents, in fact Real Estate enabled real estate agents to improve thier service offering to customers being able to get ads up online so easily, more marketing offering, and also helped Real Estate.com become a juggernaught.
Customer acquistion cost as a % of operating revenue continues to drop. Mad Paws has reached a pinnacle point of brand recognition where momentum of advocay from existing customers, repeat rates, etc, means less spend over time acquiring new customers, already reflected in quarterly mareting and operational expenses having dropped significantly as a percentage of earnings; eg, q3 2022 36% marketing, 120% opex, vs. q4 2022 19% marketing, 64% opex. (4/8/22 presentation).
Some other key financials from most recent quarter update: Quarterly GMV up 189% for Q4 2022 from Q4 2021. Group operating revenue up 294% for Q4 2022 from Q4 2021. Marketplace operating revenue up 71% for Q4 2022 from Q4 2021. E-commerce and subscription (Waggly) operating revenue $3.2 million.
