Chewy, an online pet product retailer owned by PetSmart, opens up ~64% on its first day of trading after raising $1B in its IPO, and is now valued at ~$14.3B
KEY POINTS — PetSmart acquired Chewy.com in 2017 for roughly $3 billion to add an online business to complement its store base, as trends shifted online.
Context & Ripple Effects
Two years after paying $3.35B for Chewy.com in the largest e-commerce acquisition on record, PetSmart has taken the retailer public — converting a defensive buy made as pet shopping shifted online into a standalone market listing. Chewy's April IPO filing showed the trade still runs at a loss: $268M of net loss on $3.5B in fiscal 2018 sales.
The ~64% first-day pop to a ~$14.3B valuation dwarfs the reception Snap got when its first day of trading closed 44% above its offer price in 2017 — a signal that public investors were rewarding profitable-looking revenue growth in pet e-commerce, not just consumer-tech novelty. It also validates the bet Mars made earlier when it paid over $100M for pet-wearable maker Whistle: pets are a premium category.
First-order effects
- PetSmart now holds a majority stake in a company worth roughly four times what it paid for the whole business, giving it a liquid asset and an exit path without ceding control.
- Public-market scrutiny replaces private ownership: Chewy must report quarterly against a $268M annual loss and defend its spending on a $3.5B revenue base.
Second-order effects
- Rival retailers and pet-supply players face a well-capitalized Chewy whose currency is now publicly traded stock, pressuring them to accelerate their own online operations or seek buyers — a dynamic already visible in China, where Crazy Dog raised a $43.4M Series B on $86M+ of 2018 revenue to chase the same shift online.
- Investment banks and later-stage backers gain proof that loss-making e-commerce retailers can price large IPOs with big first-day pops, encouraging similar filings across vertical retail.
Third-order effects
- The pattern points toward pet care consolidating into vertically integrated platforms — food, products, services and devices under few owners — following the same arc from Whistle's sale to Mars through Chewy's listing, with private equity (as Blackstone's later pet-services deals show) competing for what remains independent.
- If first-day pops of this size persist, issuers and underwriters will face renewed pressure over IPO pricing — money left on the table becomes a recurring governance argument in retail listings.
The trend: Vertical e-commerce leaders spun out of brick-and-mortar parents are becoming standalone public platforms, turning category-specific online shifts into consolidation plays across pet care.