Pet owners are always searching for new and convenient ways to get their pets the care they need, and that's where recent IPO Rover Group (ROVR +0.00%) comes in. In this Fool Live video clip, recorded on Sept. 15, Senior Analyst Asit Sharma discusses what Rover does and why it could be a stock worthy of a spot on your watch list.
Asit Sharma: The symbol is R-O-V-R. The company is the Rover Group. That's right, ladies and gentlemen, as in Rover, a pet. This is the world's largest company which provides an online marketplace for pet care. It's a two-sided platform and it connects owners of pets with those who are providing services. Those services can be anything from boarding and in-house pet sitting to taking pets for a walk, doggie care, pet grooming, et cetera. This is a company that issued their S-1 all the way back in February.
I did a deep dive on the company with Emily Flippen on our industry-focused podcast. We both were very interested in it. It's now public as of August. I have to say that there's something about this that reminds me of other successful platform businesses. I really like businesses like Etsy (ETSY 7.02%) or like PayPal (PYPL 0.68%) on the payment side that provide that two-sided type of marketplace. Rover certainly does that. I'm going to not break character here and also share my screen for just a moment to look at a few big picture things. Can you guys see that OK?
I mentioned they are the world's largest online marketplace, about ten times the size of their next competitor. This is a really big theme with this company is a shift of offline pet services to online so instead of calling up your friends and family or going through offline channels, they've made this process super simple with an app. Why I think the interface is so important is because this means everything to the growth of a marketplace business. Does that mean I have 54 seconds? Is that our timer? Okay.
Danny Vena: Yeah, you got about a minute left.
Sharma: Yes, so within a minute, let me just quickly take a step back here just to show you that the Co-Founder and CEO, Aaron Easterly, has great experience at Microsoft (MSFT 0.68%). He still has about three percentage points in the company. The venture capitalists that funded the company are actually staying onboard.
Afterward, I am going to show you a few more big picture highlights in the last few seconds I have. These stats really appeal to me. This is the compounded annual growth rate of their annual gross booking volume, the money that float over their platform. But their take rate is about 20%-25%. They have 96% of U.S. population covered in terms of major metropolitan areas and they've got 80% repeat bookings. You can see an annualized recurring revenue picture developing here.
The other thing that I really like about Rover is that the comparisons in 2020 to 2021 are difficult. The company was challenged in 2020 when everyone was on lock-down. They're comparing now their results to 2019 to give investors a clear picture in their first quarterly report as a public company. They didn't bother to show how great they did against 2020. They showed how they did against 2019, which is presenting more modest results. To finish, I want to point out that in their first quarter as a public company, they reported really phenomenal growth in that platform bookings. Gross booking volume of $134 million and the company raised its full-year guidance. Our risk here to consider is that the industry itself is very nascent. If you buy this one it's going to be a bit volatile.
