Pet owners today have unlimited spending options.
From spas to organic meals to orthopedic beds, dog and cat owners have access to a huge market of options to pamper their furry friends, and as a result, we’re spending money on them like never before.
It is estimated that last yr greater than $320 billion worldwide spent on pet careBy 2030, this number is expected to rise to almost $500 billion.
However, pet care startups are not as popular as they once were.
According to Crunchbase, just over $500 million has gone to about 50 pet care and veterinary startups globally this yr. data. This puts 2024 on track to be the lowest space investment in years, each in terms of rounds and total funding, as shown in the chart below.
Who receives funding
However, despite the slowdown in funding, we did see several firms raise large rounds of funding for pet health purposes.
One of the largest fundings went to Loyalwhich develops drugs that reach the healthy lifespan of dogs. The San Francisco-based company, which received $40 million in Series B funding in March, is one of several startups offering services for senior animals to lift funding in recent years.
Based in Denver Sploot Veterinary Carewhich offers primary and emergency pet care, also raised $40 million in January funding backed by a consumer-focused investor L. Catterton.
And when it involves business software, MoeGoplatform that allows pet groomers and other care providers to administer their services, raised $24 million in Series A funding in March.
To get a broader picture of pet industry firms that have received funding, we’ve put together a list of 10 firms that raised enterprise capital funding this yr.
Diverse record of unicorns and exits
The decline in pet-related funding comes against the backdrop of a broader decline in enterprise capital investment in consumer products and services, as enterprise capital funds have been shifting their investments toward areas equivalent to artificial intelligence, biotechnology and cybersecurity.
But it wasn’t at all times that way. Historically, pet care startups have raised significant funding. Over the past five years, for example, pet care startups have raised greater than $6 billion and generated several large exits.
Probably the largest and most successful is the online supplier of pet food and products Chewingnow a $13 billion public company. Initially a venture-backed company, Chewy was sold for $3.35 billion in 2017 AnimalSmartwhich later spun it off as an IPO.
Another major beneficiary of funding is the pet care market. Wandererwent public via SPAC in 2021. It lasted just over two years as a public company before morphing into a private equity firm Blackstone Group privatized it for $2.3 billion.
Other heavily funded firms have not fared as well on the public market. Wavedog walker and sitter platform, has fallen greater than 90% since going public via SPAC in 2022. Shares Bark (formerly BarkBox), a dog product subscription service, has seen an 86% decline since the company’s 2020 debut.
Still a huge market
However, lower than successful departures shouldn’t be a signal that individuals are paying less attention to their pets.
This is very true in the United States. About half of pet owners not only consider their pets to be relations, but also say they are as essential to them as people, based on data Pew Research Center report.
The Americans themselves are expected to spend just over $150 billion on their pets in 2024, based on American Pet Products Association. About two-thirds of that goes to food and supplies, and one other quarter to veterinary care. The rest goes to services like walking, grooming and pet sitting.
That feels like a huge number — but it’s also spread across a huge variety of pets. An estimated 82 million U.S. households now have pets, including 58 million with dogs and 40 million with cats (some with each). Millions more care for birds, lizards, fish, and other animals.
Of course, it ought to be noted that some of what passes for “pet care” is more about pleasing humans. For example, cat clothes are largely despised by real cats. And it’s unlikely that the lizard Halloween costume category (yes, that’s thing) is highly appreciated by our reptilian companions.
Still, while we may find higher uses for our disposable income in some use cases, no one is predicting a slowdown in pet-related spending. While investors may have less appetite in the current cycle, there is still room to grow for startups that find ways to assist pets live longer, healthier, and happier lives.