As a discerning pet parent and savvy online shopper, I‘ve long been fascinated by the meteoric rise of Chewy.com. In just over a decade, this upstart e-commerce company has become the undisputed leader in pet supplies, captivating millions of customers (myself included) with its unparalleled service, selection and convenience.
But lately, I‘ve found myself wondering: who actually owns Chewy? Is it still the same scrappy startup that burst onto the scene in 2011, or has it been swallowed up by corporate behemoths and faceless institutional investors?
As someone who carefully considers where I spend my money and what companies I support, I decided to investigate Chewy‘s ownership structure. What I uncovered was a complex and ever-evolving story involving a multi-billion dollar private equity takeover, a record-breaking e-commerce acquisition, and a public market debut that valued Chewy at nearly $9 billion.
The PetSmart Acquisition That Changed Everything
To understand who owns Chewy today, we have to go back to 2017. At the time, Chewy was a rapidly growing but still privately held company, generating close to $900 million in annual sales. Founded just six years earlier by entrepreneurs Ryan Cohen and Michael Day, Chewy had quickly established itself as a major disruptive force in the pet supplies industry.
It was then that Chewy caught the eye of PetSmart, the largest brick-and-mortar pet retailer in the US. In a bold move, PetSmart announced it would acquire Chewy for $3.35 billion in cash, making it the largest e-commerce acquisition in history at the time.
However, there was an interesting wrinkle to the deal. PetSmart itself was owned by BC Partners, a private equity firm that had taken PetSmart private in a $8.7 billion leveraged buyout in 2015. So when PetSmart acquired Chewy, BC Partners essentially became Chewy‘s parent company as well.
This multi-layered ownership structure would play a critical role in Chewy‘s future. Although PetSmart allowed Chewy to continue operating as an independent subsidiary, it was clear that the strategic decisions and financial maneuverings of these corporate owners would shape Chewy‘s trajectory.
Chewy Goes Public, But Control Remains Private
Fast forward to June 2019, when Chewy made its highly anticipated debut on the public markets. The company raised over $1 billion in its IPO, with shares priced at $22, giving Chewy an initial market cap of $8.8 billion.
On the surface, it appeared that Chewy was now a fully independent public company. But looks can be deceiving. As part of the IPO, PetSmart retained a majority stake in Chewy, holding onto over 70% of the company‘s common stock as well as a special class of shares with outsized voting rights.
In essence, BC Partners (through PetSmart) maintained control over Chewy, even as public shareholders bought into the company. This "public-but-still-private" ownership structure is not uncommon, particularly among tech companies and startups backed by private equity and venture capital. But it does raise questions about accountability, transparency and alignment of interests between insiders and outsiders.
Interestingly, PetSmart didn‘t seem entirely comfortable with its continued ownership of Chewy. In late 2020, PetSmart attempted to sever ties with Chewy through a recapitalization plan intended to raise cash and pay down debt. The plan called for spinning off PetSmart‘s stake in Chewy and relinquishing control – but PetSmart struggled to find buyers willing to take on such a large block of shares.
Chewy‘s Ownership Today: A Mix of Institutions and Insiders
So where does that leave Chewy‘s ownership today? As of 2023, Chewy remains a publicly traded company, but with a widely dispersed shareholder base that includes both institutional investors and company insiders.
According to recent filings, PetSmart (and BC Partners by extension) is still the largest shareholder, but its stake has been whittled down to about 30% of outstanding shares. This reduced position is the result of both secondary share offerings and BC Partners selling off chunks of its stake over time to cash out and return money to its own investors.
After PetSmart/BC Partners, Chewy‘s next largest shareholders are a who‘s who of major investment firms:
| Shareholder | Shares Owned (Millions) | % of Total Shares |
|---|---|---|
| BC Partners (via PetSmart) | 99.0 | 30.2% |
| Baillie Gifford & Co. | 13.3 | 4.1% |
| Morgan Stanley | 9.0 | 2.7% |
| FMR LLC (Fidelity) | 7.7 | 2.4% |
| T. Rowe Price | 5.7 | 1.7% |
| Vanguard Group | 5.4 | 1.6% |
| BlackRock | 5.2 | 1.6% |
Source: company filings and data from Bloomberg
Together, these big institutional players control a significant chunk of Chewy‘s shares and wield considerable influence over the company‘s governance and direction.
As for insiders, Chewy‘s co-founder Ryan Cohen (who served as CEO until 2018) has mostly exited the company and sold his shares. Current CEO Sumit Singh owns about 1.2 million shares, representing roughly 0.36% of shares outstanding. A handful of other executives and directors also have skin in the game through stock awards and options, but their ownership stakes are relatively small.
Why Chewy‘s Ownership Matters
Now, you might be thinking: so what? Why should I care who owns Chewy, as long as they keep delivering the products and service I rely on for my furry friends?
It‘s a fair question. For most customers, the day-to-day shopping experience on Chewy.com likely won‘t be affected by who the company‘s largest shareholders are or what its cap table looks like. Chewy‘s brand, value proposition and operational excellence should remain intact regardless.
However, there are a few reasons why even casual customers should pay attention to Chewy‘s ownership:
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Influence on strategy and direction: The major shareholders and board members of a company like Chewy have significant sway over its long-term strategy, priorities and major decisions. If there are competing visions or misaligned incentives among key stakeholders, it could impact Chewy‘s focus and execution.
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Access to resources and support: Chewy‘s ability to invest in growth, innovation and customer experience is partially dependent on the financial resources and strategic guidance of its owners. A supportive and deep-pocketed investor base can give Chewy the runway it needs to keep scaling and fending off rivals.
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Governance and oversight: A company‘s ownership and board composition can also influence its governance practices, transparency and responsiveness to stakeholder concerns. As a customer and member of the public, you should feel confident that Chewy is being managed responsibly and ethically.
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Potential for future changes: While Chewy‘s ownership is relatively stable for now, there‘s always the potential for shake-ups down the road – whether it‘s a major shareholder cashing out, a private equity firm orchestrating a new deal, or even an acquisition by a larger corporation. Staying attuned to ownership can give you a heads up on any impending shifts.
At the end of the day, Chewy‘s success will be determined by its ability to keep executing on its core value proposition: delighting pets and pet parents with exceptional service and a seamless e-commerce experience. As long as Chewy stays true to that mission – and its owners enable and support that focus – customers will likely keep flocking to the site.
Chewy‘s Lasting Impact
Zooming out, Chewy‘s journey from scrappy startup to $30 billion public company is emblematic of larger trends reshaping the retail and e-commerce landscape. The company‘s success has validated the demand for online-first, customer-obsessed brands that prioritize experience and convenience over physical scale.
It has also shown the power of private capital to supercharge a company‘s growth and accelerate its path to market dominance. Would Chewy have achieved escape velocity without the deep pockets and aggressive dealmaking of a private equity firm like BC Partners? It‘s hard to say, but the company‘s trajectory was undoubtedly boosted by that partnership.
At the same time, Chewy‘s story underscores the blurring boundaries between public and private markets. With more companies delaying IPOs or opting for alternative pathways like SPACs, direct listings and tender offers, the traditional concept of "going public" has been disrupted. Chewy is a prime example of a company that is technically public but still closely held and controlled by private interests.
Looking ahead, it‘s clear that Chewy has further room to grow and innovate. The global pet care market is expected to top $350 billion by 2027, driven by the pandemic pet boom and long-term trends like humanization and premiumization. As the leading pure-play pet e-tailer, Chewy is well-positioned to capture a big piece of that expanding pie.
Of course, challenges and competitive threats remain. Chewy will have to continue investing heavily in fulfillment, technology and marketing to stay ahead of Amazon, Walmart, Petco and upstarts like Bark. Margin pressure, supply chain headaches and shifts in consumer behavior could all put a damper on growth. And there‘s always the risk that Chewy‘s owners could make decisions that prioritize short-term returns over long-term value creation.
But for now, Chewy‘s future looks bright – and millions of loyal customers (human and pet alike) will be cheering them on. As one of those devoted shoppers, I‘ll be keeping a close eye on Chewy‘s continued evolution, including any changes in ownership that could shape its trajectory. Because when you find a brand that truly gets you and your pets, you want to make sure it stays true to its mission and values for the long haul.
