Mathias Veil of Veeto
How Veeto solved its subscription cash flow issues with funding from Valerian
The premium dog food company used revenue-based financing to delay a VC round
“Valerian has helped us fill the gap with four months of marketing budget in advance. After just 24 hours, they granted the advance. We can borrow up to €400,000, which is a significant amount that we can use to keep the business growing without having to raise VC money yet.” – Mathias Veil, Founder and CEO, Veeto
Business challenge: Veeto was scaling rapidly and having cash flow challenges due to a 4-6 month payback period for the cost of customer acquisition
Valerian impact: The company was able to fill the gap and get months of marketing funding in advance, so it could continue scaling at pace.
Launched in 2020, Veeto is a premium dog food company that feeds thousands of dogs every day through a membership subscription model. Dogs love it, their humans love that they love it, and everyone’s happy to know that good pups are getting high quality nutrition.
Veeto’s customized meal plans – which are recommended based on a survey each customer must fill out about their dogs – are calculated by an algorithm that analyzes the dog’s nutritional profile and matches them to the right food.
Despite the popularity of the subscription service, Veeto’s customer acquisition costs aren’t usually recouped until around the 4-6 month mark. Such is the case with many subscription models. That’s not to mention that it’s necessary for Veeto to offer a trial “discovery box” to ensure both dog and owner are happy with the products (which is, much to the credit of Veeto’s quality ingredients, almost always the case).
Veeto founder and CEO Mathias Veil explained that it was important for his company to continue its high customer acquisition rate through digital marketing campaigns, despite the upfront costs.
“We’re in a very competitive industry and we believe it’s important to grow quickly,” he said.
“As we are scaling, we need to spend more on our digital marketing channels to increase brand awareness. The problem is that for our Facebook and Google ads, the ROI on what we spend comes months after. So there is this crucial gap that is only increasing as we are scaling the business.”
That’s where Valerian came to the rescue with a non-dilutive advance that allowed Veeto to continue its rapid growth.
“Valerian has helped us fill the gap with four months of marketing budget in advance,” Veil said. “After just 24 hours, they granted the advance. At first, it was €20,000, but then it started to increase after just a few weeks once they received continuous revenue data from us. We can borrow up to €400,000, which is a significant amount that we can use to keep the business growing without having to raise VC money yet.”
Ultimately, Veil envisions raising VC funds for Veeto at some point in the future. But revenue-based financing allowed him to delay the new funding round and increase company valuation beforehand.
“We’re always working on developing new products, so that’s certainly good news for us!”