F26 — Financial Risk
Downside Cases and Stress Tests
This page answersWhat has to go wrong before the case stops working?
Each test below changes one variable and holds everything else constant, so the effect is attributable.
Assumptions are shared across every financial page — change one, all outputs recalculate.
210–211 — Three cases
Conservative, base and scale outcomes
| Case | Revenue | Recurring share | EBITDA | LTV : CAC | Payback |
|---|---|---|---|---|---|
| Conservative | US$7.2M | 55.7% | US$-4.3M | 0.76× | 46.1 mo |
| Base | US$54.3M | 38.0% | US$20.4M | 6.29× | 6.2 mo |
| Scale | US$410.6M | 25.5% | US$232.5M | 15.09× | 3.2 mo |
212–213 — Stress tests
Single-variable shocks against the current scenario
| Shock | Revenue | Change | EBITDA | LTV : CAC | Severity |
|---|---|---|---|---|---|
| CAC doubles | US$54.3M | 0.0% | US$20.4M | 3.14× | Survivable |
| Retention falls by one third | US$54.3M | 0.0% | US$20.4M | 4.21× | Survivable |
| Take rate halves | US$51.7M | -4.9% | US$18.3M | 5.84× | Survivable |
| Merchant churn doubles | US$54.3M | 0.0% | US$20.4M | 6.29× | Survivable |
| Merchant base halves | US$46.5M | -14.4% | US$14.3M | 6.29× | Survivable |
| Insurance referral removed | US$53.3M | -1.8% | US$19.6M | 6.12× | Survivable |
| Fixed cost rises 40% | US$54.3M | 0.0% | US$11.6M | 6.29× | Survivable |
Concentration
Where the risk actually sits
Revenue dependent on merchant subscriptions
Revenue dependent on transaction volume
Revenue dependent on insurance referral
Structural risks not captured by the model
- · Venue data decay — pet policies change constantly and stale data destroys trust faster than it builds it.
- · Insurance producer licensing timelines vary by state and can delay a modelled revenue stream by quarters.
- · Veterinary fee-splitting restrictions constrain the lead-fee model in several states.
- · A well-capitalised incumbent adding a pet-friendly filter compresses differentiation without acquiring anything.
Stress tests move one variable at a time. Real downside scenarios correlate — CAC usually rises at the same time retention falls — so the combined effect is worse than any single row shown here.
Investor implication
Only two shocks break the case outright: a doubling of CAC and a material retention shortfall. Both are measurable within one metro and one year, which is precisely why the rollout should be staged rather than national.