$673 Million For Pet Care Startups?

Morning Report: Let’s close out the week with a sanity check.

This week Rover announced that it raised $125 million in equity funding and $30 million in debt. The new capital and access thereof will help it compete with rival Wag, which recently raised huge sums from Softbank.

The two companies operate in the pet care space, offering services like dog walking.

(We wound up talking about the matter on Equity this week if that’s your sort of thing.)

Pet care is not a small market. Pets are a huge business, often requiring regular care and frequent interaction. So, if you want to sell dog walking, or put pets up while owners are out of town, there’s plenty of revenue to go around.

So much so in fact that investors domestic and abroad have poured nearly unbelievable sums into the space. How much? Here’s an eye-catching passage from Fortune’s Polina Marinova from earlier today:

The funding comes on the heels of the $300 million in funding that rival Wag raised from SoftBank just a few months ago. Both companies are playing with serious money now, and it appears that Rover & its lead investor T. Rowe Price are not afraid to challenge SoftBank’s kingmaker strategy.

Both startups are entering each other’s turf, both have a nearly identical paw logo, and both are very well-funded. In total, Rover has raised ~$311 million while Wag has raised ~$362 million.

Doing some sums, I think that 311+362=673, or, in our case, $673 million for just these two companies. That’s a simply hilarious amount of money.

(We wound up talking about the matter on Equity this week if that’s your sort of thing.)

In today’s market, the IPO window is quite open, stocks are doing well, and late-stage startups are doing well. Perhaps that will sort out just fine. But if that doesn’t happen, and here in the later stages of this bull run we see a number of bets implode and quite a lot of capital destroyed, I’ll be curious if deals like the above are later viewed as high-water marks of oops.

That or they’ll be brilliant and my concerns here will seem alarmist and silly. We’ll see.