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When industry giants and dot.coms come together, it's profits that fly round and round.
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.
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"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."