Pet care startups are no longer a new thing. The global market is growing rapidly thanks to technology that’s changing how consumers buy products. According to a 2018 report by Grand View Research, Inc. Rise, the global pet care market is expected to reach $202.6 billion by 2025. Advances in technology are making boarding, grooming, and training facilities more easily accessible to the owners.

Amid a crowded and competitive market of pet care startups, there are only a few players who manage to attain success. Shanghai-based Mollybox is one of them.

The pet food brand run by Xolo (Cayman) Limited, recently announced that it has secured a total of $13 million in its Series B financing round, co-led by DCM and Mars backed venture capital Digitalis. The other strategic partners and investors involved in this round include Unity Ventures, Digitalis Ventures, Seek Ventures, FJ Labs, Tekton Ventures, and Long Capital, making Mollybox one of the most promising pet food brands, which is expected to grow further this year.

Outpacing the Petcare Industry

The startup has developed a unique business model in China’s pet food sector by introducing a subscription-based service. Often referred to as the Chinese equivalent of BarkBox, Mollybox not only provides cat litter and cat food but also sends cat owners a “Surprise Box” every month filled with various kinds of cat snacks and nutrition products to fulfill consumers’ pursuit in exploring new products.

“We are very proud at the confidence that our investors, both old and new alike, have shown in the promise of our company. The strength of our business model has driven growth that has outpaced the overall pet food industry. Our highest monthly turnover in 2017 was RMB 1.8 million, but this number jumped to RMB 20 million in 2018,” said Ju Yi, founder and chief executive officer of Mollybox in a statement.

How Urbanization is Helping Mollybox

Many millennials are flocking to cities, leaving their friends and families behind. To ward off loneliness, they start keeping pets, who cheer them up. Yi believes this is a good environment in which a subscription-based service can expand its business.

“With the continued trend of urbanization in China, our prospects continue to be very good,” he added.

The company has thus quickly gained market share. It served less than 2,000 subscribers in 2017, but now has a total of 30,000 who are receiving its products.

“After enabling the AutoPay feature, we expect to achieve a user base of 200,000 subscribers in 2019 with the total sales income reaching RMB 330 million,” said Ju YI.

As Mollybox has developed its user experience and products, the company has seen a surge in growth, which tracks the continuing 20-year trend of urbanization, with young people flocking to cities for education and jobs. Its success is highly connected to China’s rising pet market. And continued success will require a focus on affordability and convenience.

In addition to its focus on price and service, the startup is constantly studying the market. Every time it sends out a box, the company collects feedback from consumers to better understand the preferences of their cats so that the brand will be able to assemble a mix of products that best suits them next time.