Tech start-ups aim to collar US $50bn pets products market

June 5, 2013 7:21 pm

Tech start-ups aim to collar US pets market

By April Dembosky and Tim Bradshaw in San Francisco and Louise Lucas in London

Thirteen years on from the collapse of Pets.com, the company that became synonymous with the bursting of the dotcom bubble, and Silicon Valley is ready to try again. A new crop of tech start-ups is reaching for a piece of the $50bn market for pet products.

Venture capitalists have invested $6m into Whistle, a San Francisco start-up that on Wednesday launched its wireless fitness tracker for dogs.“There are more dogs than children in the US,” said Ben Jacobs, Whistle’s 26-year-old chief executive who founded the company last year after studying the pet industry at Bain consulting.

The $99.95 device attaches to a dog’s collar and tracks the dog’s every move, then sends a data readout to the owner’s smartphone. The goal, in addition to providing owners a window into Fido’s secret life while they are at work, is to collect and analyse data for patterns that can warn of canine health problems before they become too serious, or too expensive.

Pete Moran, a general partner at DCM Ventures, which led the Whistle investment, said products like this are only the beginning.

“In the coming year you’ll see many more companies try to bring the power of technology into the pet market,” he said.

Before many of the buzzy tech start-ups targeting human needs have become profitable or sorted out their legal problems, there is an equivalent catering to pets.

DogVacay, described as the “Airbnb for dogs” and backed by $7m in funding, allows pet lovers to rent out their private homes as an alternative to leaving Rover at the local kennels. Swifto, the “Uber for dog walking”, allows pet owners to “hail” a vetted, insured, and “college educated” dog walker, then track the walk via GPS on their phone. And Pintofeed, similar to the Nest “learning thermostat”, is an “autonomous pet feeder” that is said to learn when a dog or cat likes to be fed and automatically dispenses food at the right times. The $149 device will be released in October.

During the tech bubble of the late 1990s, online pet companies were seen as the pinnacle of overreaching, overpriced internet concepts. But Mr Moran said this time around was different. In addition to lower hardware costs, marketing is more targeted and engineering is more advanced.

In the coming year you’ll see many more companies try to bring the power of technology into the pet market

– Pete Moran, DCM Ventures

“The exuberance that went on in many sectors, pets and otherwise, got investors and entrepreneurs funding and creating businesses that did not have underlying business models,” he said. “It’s always a bit of a guess to figure what consumers will buy, but the use of funds now is much smaller, and the precision of products is much better than in the dotcom era.”

The appetite for such ventures was underlined on Wednesday when traditional pet food company Nestlé Purina PetCare announced it would acquire its first website – Petfinder.com, a pet adoption network.

For Nestlé, the world’s biggest food company, the purchase of the oldest and largest website for pet adoption is aimed at increasing reach to potential customers. Petfinder has 7m unique visitors a month, and has facilitated more than 22m adoptions.

Nestlé’s Patrice Bula, head of strategic business units, marketing and sales, said it would “enable us to deepen engagement with and support of pet lovers”.