UK direct-to-consumer dog-food company Butternut Box has secured £280m ($352m) in funding from global growth equity firm General Atlantic and existing investor L Catterton.
The investment, which reportedly implies a company valuation of around £500m, will be used to expand Butternut Box’s presence in Europe.
The deal is expected to close in the fourth quarter, pending regulatory approvals.
Butternut Box, set up by former Goldman Sachs bankers David Nolan and Kevin Glynn in 2016, has been pursuing a strategy of geographic expansion for some time. It acquired Polish fresh dog food brand PsiBufet in April and, in 2021, used £40m of primary capital raised to support diversification into new products and markets. Less than a year later, the company announced the launch of its dog-food delivery service in Ireland and the Netherlands.
According to GlobalData’s market analysers platform, Europe is the largest pet-food market after North America and Latin America. The European market is valued at an estimated $14.3bn.
The rapid development of Europe’s pet food markets is largely related to the significant growth of its dog and cat populations during the pandemic. Data from the European Pet Food Industry Federation shows the European pet population grew by 11% from 305m in 2021 to 346m in 2022.
Other pet food companies eyeing international expansion include Vegdog, a Germany-based vegan dog food brand, which completed an investment round of approximately €3.5m in late 2022 and is using the funds to expand beyond its German-speaking markets.
The largest players in the market continue to invest. This year, Mars has announced investment projects in France and Australia.
And L Catterton has added to its interests in pet food with the acquisition of a minority stake in Indian pet food Drools Pet Food Private Limited in a deal worth around $60m.
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