Two years after its seed round, the fresh pet food brand is raising an additional €3.4 million in equity from Swiss agrifood fund Ambrosia, regional investor Go Capital, and around half a dozen business angels, with a view to establishing its own production facility.
CFNEWS article by Aurore Barlier, published on July 8, 2022, at 9:53 a.m
Japhy, Tomojo, Ultra Premium Direct… The pet food sector has given rise to a host of new players in recent years, some of which have carved out a strong position around healthy nutrition. That is the focus of Pépette, founded in 2019, which is now raising its second funding round with the ambition of becoming the European leader in a new market: fresh food for dogs and cats.
Following a €1.1 million seed round in 2020, the Paris-based company has now raised €3.4 million in cash, with Rothschild & Co having been brought in to seek investors starting last November. The round — complemented by €1.6 million in non-dilutive financing from Bpifrance and Banque Populaire — is being led by Swiss-origin agrifood fund Ambrosia and Go Capital through its Loire Valley Invest and Financière Vecteur funds.
A number of business angels are also joining the round, including Augustin Paluel-Marmont (Michel & Augustin), Patrick Asdaghi (FoodChéri and Seazon), Benjamin Perot (Monsieur Marguerite), Franck Bonfils (Juste Bio), and Sebastien De Lafond (Meilleurs Agents), who also participated in the seed round. The transaction values Pépette at around €15 million.
A 100% Digital M
Offered on a subscription basis, Pépette’s services rely on a proprietary algorithm that determines a tailored feeding plan designed to meet the specific energy needs of each dog or cat. The personalized nutrition brand then prepares meals using ingredients fit for human consumption and delivers them directly to customers.
“Pépette’s offering addresses a genuine need around reintroducing fresh food into pet nutrition,” says Benjamin Osdoit, Managing Director at Transaction R & Co, noting that nearly one-quarter of dog and cat owners give their pets fresh food.
With 12 employees — rising to 20 by September — the company currently generates more than €100,000 in monthly revenue. “Made from fresh, human-grade ingredients, this traditional meal model, known as ‘home-prepared diets,’ provides significantly higher nutritional value and is much better absorbed by animals from a digestive standpoint,” explains Marine Thersiquel, founder of the industrial start-up, whose approach is positioned as the opposite of kibble, which she considers highly processed and high in carbohydrates and lower-protein ingredients such as carcasses, cartilage, and feet.
Prioritizing Circularity
However, the company’s main objective is to bring production in-house by establishing its own facility in the Centre-Val de Loire region within the next 24 months. This will allow it to regain control over the value chain and work on supply-chain initiatives.
“For example, we are considering sourcing undersized vegetables that are perfectly fit for human consumption. On the protein side, we are looking at local sourcing while avoiding competition with products intended for human consumption, for example by prioritizing underutilized animal parts that are rarely used in human cooking,” explains Marine Thersiquel.
This approach could give Pépette another competitive edge. “By bringing production in-house, the company will be able to continue developing its industrial expertise while maintaining full control over the entire value chain, thereby creating a genuine barrier to entry. It is also key to building a profitable business model that can be sustained over the long term,” adds Benjamin Osdoit.
A Market to Build in Europe
In the United States, fresh pet food is already the fastest-growing segment, taking significant market share from traditional kibble manufacturers. The acquisition of Nom Nom Now — one of the pioneers in the market — by Mars for approximately $1 billion is a case in point.
Pépette’s founder, however, is not yet aiming quite that high. Over the next five years, Marine Thersiquel hopes to grow the brand’s revenue to several tens of millions of euros and build a subscriber base of more than 150,000 customers, establishing Pépette as a European leader in a market that remains largely untapped, despite the presence of a few young companies such as UK-based Butternut Box and Belgian player Dogchef.
Although the brand is currently sold exclusively online, it is open to partnering with distributors — many of which have already approached the company — to offer its products through dedicated shop-in-shop corners. “The key is to continue providing our customers with advice and enhanced services, as they are very receptive to educational content,” says the founder.
Transaction Participants
Target Company: PEPETTE
Acquirer or Investor: AMBROSIA INVESTMENTS, Adrien Tardy, Abel Rossignol, GO CAPITAL, Alexis Ménard, BUSINESS ANGELS, Augustin Paluel-Marmont, Patrick Asdaghi, Benjamin Perot, Sébastien de Lafond
Corporate Law Firm: CHARLES RUSSELL SPEECHLYS, Renaud Ferry, Chloé Huertas
