Here’s the scoop on how Whisker, a Litter-Robot manufacturer with $180 million in sales this year, aims to get stinking rich off the business of kitties doing business.
eRick Dosantos loves his cat, Autumn, but he hates shoveling autumn poop.
Like most cat lovers, DosSantos, a media producer in Los Angeles, used to use the typical plastic litter box with a rake. He found it disgusting. DosSantos decided to do something about it. About five years ago, he paid $545 for a self-cleaning box called the Litter-Robot 3. Since then, he’s upgraded to the Litter-Robot 4, which retails for $699. He now has both the old robotic box and the new one, each in a different area of his house.
“The shit-blasting is terrifying, and the Litter-Robot makes it a little better,” he says.
Compared to all the awful things going on in the world, dealing with cat feces is a minor inconvenience. But for 45.3 million American households have cats, It’s daily. And pet owners are big spenders. The pet industry had $124 billion in sales last year, according to the American Pet Products Association.
That spending, along with the popularity of robotic vacuum cleaners and the acceptance of the technology in our homes, has led to the growth of business for Whisker, maker of the Litter-Robot, an automated feeder and an expanding list of other products. It’s not the only company designing high-tech litter boxes. Competitors include larger companies such as Spectrum Brands (LitterMaid) and Radio Systems (PetSafe), as well as a host of cheaper imitations made in China, a perennial problem for most consumer products companies.
However, the Whisker Company in Auburn Hills, Michigan, is growing rapidly. Revenue was $150 million last year, a 20-fold increase from $7.5 million in 2015. It expects to hit $180 million in sales this year, despite lapses in its latest product rollout that have angered some customers and forced the company to slow sales. Meanwhile, it is preparing more technology-enabled pet products to roll out and coming up with ways to use the data its devices generate to flag animal health problems early on.
“We’ve grown the hardware business the good old-fashioned way of making a profit to fuel the business,” says Jacob Zupke, CEO of Whisker, 34, who notes that the company has been profitable since 2005. “We didn’t get ahead. We didn’t make big bets. That would risk the company.
Zuppke, a former marketer and advisor to the company, became CEO this year after working with founder and president Brad Baxter. Baxter remains the largest individual shareholder, with a 43% stake versus 7% in Zuppke; Investors led by private equity firm Bondera Holdings own the remaining 50%. In an effort to follow the path of iRobot, the $1.4 billion (market value) maker of the popular Roomba vacuum cleaner, Whisker brought that company’s former head of research and development, Tim Saiger, to its board in the summer of 2021. “I feel like it. I parachuted into an iRobot 15 years ago.” “It’s like I’ve seen that movie before.”
In 1999, Baxter, now 56, was in his basement cleaning up messes from two cats he’d inherited. “I would forget to scoop the box, and then I’d go downstairs and the cats would pretend and come out of the box,” he recalls. Baxter who cut his teeth at Ford and was working at the time as a consultant to auto companies thought he could solve his problem.
He bought a self-cleaning litter box early from LitterMaid, but didn’t like how it pushed out the clumping litter. “Like a pile of snow,” he says. He had the idea of letting the litter pass through a strainer to separate the dirty lumps from the clean litter. He did a patent search, and discovered that someone had already come up with the idea. He contacted the inventor, Don Ritz, and the two eventually signed a licensing deal.
Baxter convinced his father, Jim Baxter, to invest $35,000 for a 35% stake in the company to help launch the first product. The Litter-Robot is a device large enough for a cat to step inside to do its thing. After the sensors detect the cat’s departure, the device spins, sifts the soiled clumps, and places them in a litter tray below.
Like so many passion projects, the business, then called Auto Pets, began as a financial pit for Baxter. “My wife was questioning the validity of it after about five years,” he says. It is estimated that he invested more than $350,000 during that time period. “Everybody at the time looked at my product as this ugly elephant because it was so different from anything else out there and it was rather big compared to the box with a rake in it,” he says.
One reason for the losses was his plastics manufacturing process, but the retooling cost was high. “There was no bank that would lend me money,” he says. There were no guarantees. A $50,000 mold has no value to the bank.”
With connections to plastics suppliers from his auto business, he convinced one company to let him amortize the cost of the tools and another to extend a two-year loan at 12% interest. “It was all done with the relationships and the vendors I was working with,” he says. “After we reorganized in 2005, we started making money.”
With the help of profits from the growing business, Baxter and his team launched new versions of the product with technological improvements. As the direct-to-consumer business grew, they moved to a 30,000-square-foot factory in Juneau, Wisconsin, in 2008 (the plant has since increased to 225,000 square feet). Zuppke joined in 2015 as a digital marketing motivation consultant. A marketing campaign around the holiday season that year with feline influencers like Venus the Two Face Cat on Instagram, where Litter-Robot now has 140,000 followers, increased web traffic tenfold.
In 2019, Whisker ran an ad called “don’t be a scooper” Which makes fun of people who use old boxes. The company’s sales amounted to 40 million dollars and Bondera led a $31 million recapitalization That allowed Jim Baxter to cash in and Brad Baxter to take some cash off the table as well. “What Apple and Dyson have done for consumer technology is what we’re trying to do for the pet industry,” says Bondera partner Seth Barkett.
The company’s future depends on how many pet owners are willing to pay hundreds of dollars for a high-tech product. Packaged Facts, a consumer market research firm, found that only 12% of households with litter boxes own an automatic or self-cleaning version. Those who bought high-tech devices typically kept them for years, with only 8% replacing them within 12 months and another 7% within two years, according to a 2022 survey.
Those numbers help explain why Whisker relies on growth beyond automated dustbins, with products like motorized feeders, as well as from data generated by its machines to sell consumers on subscriptions. Knowing how often each cat uses the litter box and whether this pattern changes over time, for example, can be a warning sign of a UTI. “Our goal is to shape the future of pet care,” Zuppke says. “We believe the future of healthcare involves tracking your pet through food, water, and waste.”
In May, Whisker introduced its newest robotic litter box, the Litter-Robot 4. The launch didn’t go smoothly as high demand ran into firmware and hardware issues. A last-minute color change of the bezel from black to white at the request of the marketing department affected the way the sensors reacted. Another problem arose with the device’s ability to correctly measure a cat when it was placed on a carpet. “It’s always the things you think don’t make a difference that do, and then you scramble to fix them,” says Baxter.
The company had to stress shipments to fix the glitch, which lowers projected revenue for the year. in September, Zuppke posted an apology On Reddit he said the company has “paused” its phone lines to catch up. Customers with confused products were outraged. “Please Respond to Support Tickets! I’ve Laid Out Four!” wrote one customer going by the name MinnieMooseMania. Another, o_caritas, wrote: “Please make everything work again.”
As the company gets bigger, “the stakes go up,” says Saiger, a board member and former head of research and development at iRobot. “Now if you have a problem with your products, the numbers get really big really quickly so you have to invest in how to build quality design into the product.”
Zuppke notes that the company shipped its millionth Litter-Robot in early December, ahead of schedule, and that it has other products in the works. iRobot [maker of the Roomba] has become synonymous with its class.” “I think we have the same opportunity with Litter-Robot.”
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