Andrea Reisman had a problem--a huge, "Is this the end of my business?" crisis. Just a few weeks earlier, the 30-year-old co-founder and CEO of San Francisco-based Petopia.com, an online pet supply store, had been on top of the world: She had closed a May 1999 venture financing round that pumped $9 million into her start-up. But then came June 14, and her world tilted upside down when arch-competitor Pets.com announced it had closed a $50 million venture round that included cash from Amazon.com. Pets.com was simultaneously forming a strategic alliance with the e-commerce godfather. That meant visitors to Amazon.com would be peppered with continual reminders to buy kitty litter and 100-pound bags of puppy chow at Pets.com.
More aggravation came when Petsmart--a billion-dollar brick-and-mortar pet chain--announced it would merge its online outlet with independent online store pet.net, thereby transforming Petsmart.com into a formidable and slick e-commerce player.
Was it lights out for Reisman and her Petopia? It more than likely could have been, because in today's bullet-paced e-commerce battlefield, there's no nostalgia for yesterday's leaders. But Reisman pulled a fabulous rabbit out of cyberspace and, in July, closed a $66 million funding round including buckets of cash from pet store powerhouse Petco, which agreed to give Petopia exclusivity--Petopia would be Petco's only online retailing outpost.
"It's been a wild year," Reisman gushes. "The Petco deal enabled us to leapfrog over many competitors. It's really given us a head start."