VCs smell a big opportunity as petcare expands beyond food

Economic Times

a day ago

A surge in pet adoption since the Covid pandemic, coupled with the rapid expansion of petcare services and the rise of quick commerce, is prompting both risk-capital and strategic investors to seek opportunities in the petcare startup space.
ADVERTISEMENT On Monday, Swiss multinational Nestlé SA announced a minority investment in Drools, turning the Bengaluru-based pet food brand into a unicorn, or a privately held firm valued at $1 billion or more.
Supertails, a digital petcare platform backed by Fireside Ventures, is in talks to raise $24–25 million in a fresh round, people aware of the matter said.
Heads Up For Tails, a petcare brand and retail chain backed by Peak XV Partners, is also in discussions for a new round of funding, sources said.Vetic, a Gurgaon-based veterinary care startup, recently closed a $26-million funding round led by Bessemer Venture Partners.Over the last five years, petcare startups — which are broadly categorised as either product-driven offerings or services — have raised $198 million in funding across 20 deals, according to data provided by Venture Intelligence.
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Petcare startups have raised $198 million 20 deals over five years. 'Investors see this as a very healthy category because on the one side, there is growth and on the other side, it is a pure retention-based category with good margins,' said Vineet Khanna, cofounder of Supertails.
ADVERTISEMENT Founded in 2021, Supertails has raised $30 million so far, including $15 million from RPSG Capital Ventures in February 2024.
Prior to the Nestlé investment, Drools had raised $60 million from L Catterton in 2023.
ADVERTISEMENT India's petcare market, currently valued at $3.5 billion, is expected to reach $7–7.5 billion by 2028, according to a report by Redseer Strategy Consultants. The number of pets in Indian households has grown from 26 million in 2019 to 32 million in 2024, the report noted.'Higher disposable incomes, delayed marriages, and lower fertility rates are contributing to increased demand for companionship (of pets),' Khanna said.He said the industry is growing consistently with strong retention of consumers, 'especially as people spend more across categories.'
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Legacy FMCG players and consumer companies have also entered the fray. In August 2023, Godrej Consumer Products committed Rs 500 crore to the category through a joint effort with Godrej Agrovet.
Earlier, Nestlé India acquired Purina Petcare India from its global parent for Rs 125.3 crore, and Emami picked up a 30% stake in petcare brand Cannis Lupus Services India. Currently, Mars, the maker of Pedigree and Royal Canin, remains the market leader in pet nutrition in India.Alongside larger players, startups like Heads Up For Tails, Supertails, Goofy Tails, and Just Dogs have built product-led offerings, while Vetic, Petmojo, The Pet Nest, and Happy Pettings are focused on services like vet care, grooming, and training.Pet product purchases are increasingly made online, especially on platforms like Amazon, Flipkart, and quick commerce services like Blinkit and Zepto.'Ecommerce created the initial demand, but quick commerce is what's taking it to the next level,' said Renu Bisht, founder of brand consultancy Commercify360. 'Now, even in tier-II cities, pet owners can access a wide range of products without visiting niche offline stores.'Non-food categories such as grooming, supplements, toys, and accessories are now growing faster than core pet food, industry experts said.'If food is growing at 18–20% year-on-year, non-food segments like healthcare and accessories are clocking over 25% growth,' Khanna noted. 'Pet parents today are far more aware of their pets' needs.'
Prayag Mohanty, principal at Fireside Ventures, said, 'The pandemic was a clear tailwind. People were at home and started looking for companionship. That growth has continued across the category.'