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Warburg-Backed Petz Acquires Zee.Dog for BRL715m; TreeCorp, Atmos, Quartz, Charles River Exit

4 August 2021

Petz, a Brazilian pet products retailer backed by Warburg Pincus, acquired Brazilian marketplace for pet goods Zee.Dog for BRL715m, facilitating an exit for TreeCorp Investimentos, Quartz, Atmos Capital and Charles River Capital.

(LABS News) In July, the CEO of Zee.DogFelipe Diz, said in an interview with LABS that the future of the startup had only two possible paths: M&A or IPO. The exit by acquisition came this Tuesday, with the purchase of 100% of Brazil‘s pet e-commerce firm Zee.Dog by pet products chain Petz for BRL 715 million.

Controlled by private equity firm Warburg Pincus, Petz moved BRL 3.03 billion in its IPO last year. This is Petz’s second acquisition since the IPO, following the content production company Cansei de Ser Gato.

According to the terms of the transaction, of the total amount to be disbursed by Petz, the payment of BRL 615 million will be made at the end of the operation, with 87% of the amount paid in shares. The remaining BRL 100 million will be paid in cash starting in five years.

Co-founders Felipe Diz, Rodrigo Monteiro, and Thadeu Diz will remain in the operation, while investor TreeCorp and funds QuartzAtmos Capital, and Charles River Capital will leave the business.

One of the largest retail chains of pet products in Brazil, Petz has 144 brick-and-mortar shops, as well as 116 veterinary centers and 10 hospitals, according to the network’s latest financial results presentation. With the acquisition of Zee.Dog, the company adds – besides selling pet products through e-commerce – Zee.Now, a delivery app that had a boom during the pandemic, with 600% growth over 2019. Zee.Dog and Zee.Now have only 7% of revenues coming from physical shops.

Zee.Dog will keep Zee.Dog Labs, launched in April, which brings to the shop some of the storytelling about how products are envisioned by the design team in Madrid, offering a lab experience for the customer browsing the shop, and Zee.Dog Temple – due to open in the last quarter – will be flagship store, according to the CEO. The company will also maintain the Zee.Dog Human clothing unit.

With the acquisition, Petz expands to more than 40 countries where Zee.Dog now operates (not only with its shops but through partnerships and local representatives). Zee.Dog’s overseas business accounted for almost 50% of its BRL 125 million turnovers in 2020, and this share should reach 60% as early as next year.

The startup projects total revenues of BRL 250 million in 2021 and something around BRL 400-500 million in 2022. The bold projection is also based on the diversification of verticals. Recently, the company launched Zee.Dog Human, a clothing line for humans.

The numbers give the dimension of the Brazilian competitor that Cobasi and Petlove will face from now on. Petz had a net profit of BRL 11.5 million in the first quarter of this year.