Koala Health: One-Stop-Shop for Pet Healthcare

Koala is disrupting the vet care experience, starting with a mobile-first pet pharmacy

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3 min

Though there are plenty of dollars flowing into the sector, the pet healthcare experience remains outdated and cumbersome. Alumni Ventures’ portfolio company Koala Health is building a modern one-stop-shop for pet healthcare, starting with a mobile-first pet pharmacy.

A Win-Win for Pets and People

There’s never been a better time to be a pet in the U.S. The more than 90 million U.S. households that own a pet spend $123.6 billion caring for their animals. Vet care is a significant part of that spending ($34.3 billion). To help with costs, 71% of pet owners either have or are planning to buy pet insurance.

Koala’s daily pouches increase owner compliance, refill rates, and customer retention.

As a fully licensed U.S.-based pharmacy, Koala directly partners with pet owners’ vets to provide a seamless, low-friction user experience. The company pre-sorts and packages prescriptions into individual daily dosage “Koala pouches” — labeled by day and time — that are delivered directly to the customer’s door. Koala also offers an auto-refill service that automatically ships a new supply of medications before the pet’s current supply runs out.

Koala is currently focused on dogs and cats, especially those with chronic conditions that demand a complicated, regular medication regimen. As a result, Koala is addressing the significant animal health market which is expected to reach $45.4 billion by 2028. With a dual customer acquisition model that targets both direct-to-consumer and veterinary partnerships, Koala is well-positioned to rapidly scale its business.

What We Liked About Koala

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    Thriving Pet Industry

    The pet industry is projected to more than double in value over the next several years, reaching $277 billion by 2030. Pet owners are willing to pay considerable premiums for pet insurance, with the majority (91%) of those with insurance spending $150 annually and some (22%) spending over $450 a year.
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    Founded by Industry Experts

    Koala’s founding team helped scale PillPack, an online pharmacy that was acquired by Amazon for ~$1 billion. CEO Gavin Cotter was the VP of Ops Strategy at PillPack and previously worked as a Program Manager at Amazon. Co-Founder Jordan Smith has 15+ years of enterprise engineering experience at PillPack, Wayfair, Hubspot, and Amazon.
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    Well-Established Lead Investor

    Menlo Ventures is a seasoned VC with $5 billion AUM and experience investing across stages and sectors. Menlo has made several successful investments in the healthcare space, including PillPack, Pliant Therapeutics ($144 million IPO), and Recursion Pharmaceuticals ($502 million IPO).

See below for sources

How We’re Involved

Spike Ventures (for the Stanford community) sponsored our investment in Koala’s $20 million Series A led by Menlo Ventures, with participation from BoxGroup, First Round Capital, and Operator Partners. Blue Ivy Ventures (for the Yale Community), Westwood Ventures (for the UCLA community), The Yard Ventures (for the Harvard community), and AV’s Healthtech Fund also deployed capital in the round.

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Contact [email protected] for additional information. To see additional risk factors and investment considerations, visit av-funds.com/disclosures.

Sources: What We Liked About Koala

Thriving Pet Industry

Puppy Love Boost Pet Care Industry,” Morgan Stanley, November 2, 2022

Ashlee Tilford, “Survey: 78% of Pet Owners Acquired Pets During Pandemic,” Forbes Advisor, December 8, 2022

Founded by Industry Experts

Christina Farr, “Amazon Swooped In To Buy PillPack for Around $1 Billion After Walmart Dragged Its Feet,” CNBC, June 29, 2018

Well-Established Lead Investor

About Us,” Menlo Ventures, 2023

Amirah Al Idrus, “Pliant Therapeutics Pulls Off $144M IPO To Advance Fibrosis Pipeline,” Fierce Biotech, June 3, 2020

Mark Tullis, “Recursion’s IPO Generates $502 Million,” TechBuzz, April 26, 2021