Pet food startup Lyka raises $25 million in follow-on funding pushing Series B to $55 million

Sydney-based pet wellness startup Lyka has secured $25 million in follow-on funding to scale up its operations, bringing its Series B funding round to $55 million following an initial $30 million raised six months ago.

Lyka Pet Food was founded in 2018 by CEO Anna Podolsky and integrative veterinarian Dr Matthew Muir, after Podolsky’s beloved Border Collie cross, named Lyka, suffered her own health issues.

Podolsky says after researching the pet food industry, she was shocked when she discovered what was going into her dog’s bowl. However, by sourcing fresh, nutritious, whole food ingredients and making Lyka’s meals from scratch, she witnessed a profound transformation in her pup’s health. 

“I witnessed an immediate change in Lyka’s energy, coat, and even her tooth decay. I knew I needed to make these meals accessible to health-conscious pet parents, passionate about the quality and longevity of their dogs’ lives,” she says.

The backing from investors has compelled Lyka to widen its reach, with the pet food startup now servicing more areas including Tasmania, Western Australia, and more regional areas across Australia. The startup is also building a new kitchen in Melbourne and employs close to 200 employees across the board.

Podolsky said the additional investment is a vote of confidence for Lyka as a major disruptor in the pet industry. 

“The StepStone Group became interested in Lyka a few months after we closed our Series B round in October 2022,” she explained in an email to SmartCompany. 

“Given the capital market tightening, we decided to secure the [additional] capital at favourable terms to continue our high growth trajectory. We raised this money early as a preventive move ahead of a potential recession when it would be more difficult to raise capital.

Australian VCs AfterWork Ventures, Shearwater, and Point King Capital also contributed to the follow-on round. These investors have backed Lyka since its initial funding rounds, said Podolsky, and are “doubling down in this one”. 

Jessy Wu, investment principal at AfterWork Ventures, said the VC initially invested in Lyka because of the “transformational impact” of its products. 

“Its digital community is a constant stream of customer stories about how feeding Lyka has reversed the impact of chronic diseases and given pets a new lease on life,” she said in a statement. 

“We re-invested in this round because we see an opportunity beyond pet food — we back Lyka to be leaders in delivering holistic pet wellness solutions — including preventative and personalised care.”

The support from customers is also vital, says Podolsky, with Lyka close to hitting the milestone of serving 20 million bowls of pet food. 

“We have so many customers contacting us, telling us about the immediate and visible changes happening in their pet’s health,” she says. 

“This daily reminder is the gumption we need to push ahead to scale quickly so we can help more dogs than ever.”

Scaling up

Lyka will use the follow-on funding to continue meeting the increased demand the startup is seeing in dog wellness, with plans to also deploy funds to accelerate research, education, and awareness. 

The capital will also go toward infrastructure, with Lyka building a world-class, human-grade facility that will ultimately enable it to increase production capacity and serve even more pets, with the aim of improving their quality and length of life.

According to research, controlling calories can add, on average, 1.8 years to a dog’s life. So, in light of this, each Lyka meal is portion-controlled to suit weight, breed, lifestyle, and activity levels.

Co-founder Dr Muir said every week in the clinic, he is seeing the incredible transformations and financial benefits of whole foods, with so many pet parents understanding the importance of nutrition.

“From the ongoing costs associated with chronic skin and gut disease management, even, in some instances, avoiding the need for costly hospitalisations for conditions like unstable diabetes and dental surgery procedures, my clients are reaping the benefits of investing in portion-controlled, quality wholefood nutrition by saving money on vet bills and boosting their dog’s health in the process,” he said.

“As a vet, subjecting less pets to invasive clinical care and relieving some of the enormous pressure we’re under is a huge win for all.”

Lyka’s Series B raise was led by Itai Tsiddon from LGVP.