Ryan Cohen is the co-founder and former CEO of e-commerce company Chewy, an online retailer of pet food and other pet-related products, which was eventually acquired by PetSmart.
Chewy
Ryan Cohen and Michael Day, who encountered in an online chat room regarding computer programming, had joint their money for the jewelry venture. The two decided to put on the market everything at 80 to 90 cents on the dollar after Cohen persuaded his business partner that pets had better market potential. Cohen came up with the concept while shopping for Tylee, his toy poodle.
Cohen and Day utilized their funds and co-founded Chewy, under the name Mr. Chewy, an online retailer of pet food and other pet-related products. Neither holds a college degree and at the start, they were short of a business plan. Cohen and Day launched the company in 2011, along with Alan Attal, one of Cohen’s childhood friends from Montreal. Cohen was Chewy’s CEO and Day as CTO. Chewy is based in Dania Beach, Florida, and also maintains fulfillment centers in Texas, Pennsylvania, Nevada, and Indiana. The company employed former employees and executives from Amazon, PetSmart, Whole Foods Market, and Wayfair.
In need of resources, Cohen says he initially approached over 100 venture capital firms, and all of them just rejected him. Chewy has evaluated a total yearly revenue of $26 million in 2012, despite losing money in its first half year; has estimated revenue of $73 million in 2013, $204 million in 2014, $425 million in 2015, $901 million in 2016, and approximately $2 billion and 51% of online pet food and litter sales in the United States in 2017.
It spent massively on customer acquisition and retention; in 2017, Forbes reported that Chewy’s profitability was unclear, and cited an anonymous competitor who that its customer acquisition costs might be as high as $200 per customer and who said: “The bottom line is that Chewy is astonishingly predatory, and they’re prepared to lose money to increase their volume.”
In February 2018, Chewy presented a new 100,000 square foot customer service center in Hollywood, Florida, which accommodates more than 1,000 employees. Also in 2018, Chewy.com opened in Goodyear, Arizona, a new 802,671 square feet distribution facility, adding 700 new jobs to the Phoenix West Valley Metro Area. As of 2018, Chewy has a total of 8,000 employees nationwide.
Chewy filed an S-1 on April 29, 2019, for an initial public offering, aiming to trade under the ticker symbol CHWY. In its filing, the company reported a net loss of $268 million on total sales of $3.5 billion for its 2018 fiscal year. On June 14, 2019, Chewy went public on Friday.
Funding rounds
In October 2013, Chewy raised $15 million in a Series A round, led by Volition Capital. In April 2014, Chewy raised $30 million in a Series B round, led by Greenspring Associates with the participation from Mark Vadon. In August 2014, Chewy raised $41 million in a Series C round, led by New Horizons Venture Capital, with the participation from the previous investor Greenspring Associates. Allen & Company has also participated in this round of funding.
In October 2015, Chewy raised $75 million in a Series D round from its lead investor Verlinvest. In April 2016, Chewy raised $75 million in a Series E round from its lead investor BlackRock. In February 2017, Chewy raised $90 million in a debt financing round from its lead investor Wells Fargo Capital Finance. In April 2017, Chewy raised $125 million in a Series F round from its lead investor Lone Pine Capital.
Chewy has raised a total of $451 million in funding rounds and is funded by nine investors. Chewy has $3.5 billion in estimated revenue annually. Chewy competes with Pet Valu, Wondercide, and PetFlow.
Acquisition
In April 2017, PetSmart acquired Chewy for $3.35 billion, which at the time was the highest ever acquisition of an e-commerce business. A part of the deal was to have Allen & Co. served as financial advisor to Chewy. That year, Fortune recognized Cohen as one of its “40 under 40″. Cohen remained Chewy’s CEO following the acquisition and administered the business widely as an independent unit of PetSmart.
PetSmart later conveyed 20% of its ownership stake in Chewy to private equity firm BC Partners, which has owned PetSmart since 2014 and also produced an additional 16.5% of Chewy to an unrestricted subsidiary, in 2018.
Cohen decided to step down as Chewy’s CEO in March 2018, to pursue personal goals and spend more time with his family; and Sumit Singh was appointed the company’s new CEO.