BarkBox To Go Public Via SPAC At $1.6 Billion Valuation

New York subscription startup BarkBox is merging with the blank-check company Northern Star Acquisitions Corp. in a $1.6 billion deal, the Wall Street Journal (WSJ) reported, citing sources.

The initial public offering (IPO) is anticipated to raise $454 million. The demand for pet supplies has surged amid the global coronavirus pandemic, with spending on gifts for pets up 21 percent over last year. The increase in money spent on gifts for pets was more than the increase in money spent on gifts for people, the WSJ said, citing a recent PricewaterhouseCoopers report.

Founded in 2012, BarkBox has over one million active subscribers and is the latest startup to tap special purpose acquisition companies (SPACs) to go public. BarkBox sells monthly subscription boxes for dogs consisting of a variety of food, toys, treats, accessories and dental products. The company expects to reach $365 million in revenue for the fiscal year ending March 31.

The new funds will be used for international expansion, and to enhance product lines, the sources told WSJ.

It has been a busy year for SPACs and IPOs, WSJ said, citing data provider SPACInsider.

BarkBox recently hired former Amazon executive Manish Joneja as its chief executive. The investors behind North Star include former publishing executive Joanna Coles and Jon Ledecky, the majority owner of the New York Islanders.

Subscription bundles are growing in popularity, especially amid the COVID-19 pandemic. The streaming industry — Apple TV+, Disney Plus, HBO Max and Peacock — is also being leveraged by players such as Apple and Amazon.

Petco filed for an IPO earlier this month. The San Francisco company filed an S-1 with the U.S. Securities and Exchange Commission (SEC) on Friday (Dec. 4) for a Nasdaq listing with the ticker “WOOF.”