Media Money with Julia Boorstin

Start-up DogVacay tackles $11 billion market

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If you've ever returned from vacation to pick up your dog from a kennel to find a massive multihundred-dollar bill and a very unhappy dog, you'll immediately understand the value of a start-up called DogVacay.

It's kind of like AirBNB for dogs, connecting dog owners to 10,000 screened and trained dog-sitters around the country. Hosts set their prices—usually about half as much as a kennel, and the company takes a 15 percent cut. The idea is that dogs will get better care—one on one attention—and the ability to take walks or frolic in the park. And dog-sitters usually send vacationing dog hosts photos or videos as proof.

DogVacay has a website and new mobile app, allowing users to book everything online. As for concerns about the safety of dogs, CEO Aaron Hirschhorn said the company addresses that in several ways. "We provide all the quality control; we have a five-step vetting process, comprehensive insurance, 24-hour customer support."

Dogs take a break

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With a social layer allowing dog owners to write reviews, Hirschhorn said, "There's a lot of protections built in," rattling off a list, including reference checks and online training. "You can even do a no-obligation meet and greet, so you can visit the host family and see how they interact with your dogs."

And it's not just traditional dog boarding. "We have day care; we have dog walking, even some training. We're looking at the entire pet services market," said Hirschhorn. "It's an $11 billion pet services market that's completely fragmented, nobody's even got a couple points of market share—it's wide open and we're really disrupting the space across all the services."

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We checked in with a frequent DogVacay customer, Jackie Tolliver. "DogVacay has given us huge peace of mind and built a wonderful relationship with what we call 'nanny Michael puppy-sitter.'" Tolliver said. "More important than the fact that it's cheaper is the fact that we had peace of mind that they were going to be in someone's home and not in wire cages."

And Tolliver added she loved the ability to check in on her two dachshunds, with daily emails with photos and video attachments of her pets.

The service can also be a big win for the pet-sitters. Michael Lam, who hosts Tolliver's dogs, started working with DogVacay when he was working as a programmer for Goldman Sachs. But Lam said working with DogVacay was a "career-changing decision."

He's left his job as a programmer and now works as a certified dog trainer and dog host full time. "The majority of my business is actually repeat business," Lam said. "Once someone forms a bond and trust you, they will hopefully for the rest of their lives."

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So how big a business is DogVacay? Hirschhorn has raised $7 million from big-name VCs, including Andreessen Horowitz and Benchmark—Benchmark partner Bill Gurley and former MySpace President Mike Jones are on the board.

DogVacay won't reveal its revenue numbers but said in August the 18-month-old company booked 10 times as many "dog nights" as it had in January. Hirshhorn noted things are going so well they're expanding in areas like dog grooming and cat-sitting.

—By CNBC's Julia Boorstin. Follow her on Twitter: @JBoorstin