Connected Home Might Be the Next Big Thing But Connected Pet Is Big Right Now
People seem less interested in refrigerators that text them to buy milk than seeing their pets are safe and happy while they're at work.
Just over a month ago, the largest M&A deal in ecommerce history took place. To the surprise of many, it was a pet ecommerce company, Chewy.com, which was acquired by Petsmart for a cool $3.35B, which is nearly $50M more than Walmart paid for Jet.com. Shortly before the Chewy.com deal, Rover.com acquired DogVacay in an all-stock deal -- and not long before that, Whistle, a company making dog GPS and activity trackers was acquired by leading CPG Mars for $117M.
The pet industry, which until recently was largely ignored, is suddenly heating up.
Fewer kids but more pets.
Millennials are putting off marriage and children but they’re increasingly active pet parents. Sixtyfive percent of US households have at least one pet, up from 56 percent in 2012, which means the market is immense but also growing very fast. Over $100B was spent globally on pets last yet but the bulk of it -- $67 billion -- was spent in the US. As of 2017, 95 percent of US pet owners consider pets to be family members, and refer to themselves as pet parents. This is a significant increase from 63% just five years ago.
The pet industry has proven to be recession proof, growing a steady 5 percent year-over-year for the last two decades.
Emerging pet tech
There are a number of innovative startups in the expanding animal care and media space. In vet care, there’s Petcoach, recently acquired by Petco. Then there’s Wag, the Uber for dog walking services. In media, there’s The Dodo, a Buzzfeed-style animal media site. In the broader market for animal care products, there’s Cowlar, a Fitbit for Cows that improves dairy production, and BeeWeb, an on-demand platform for beekeeping. The whole pet celebrity phenomenon, led by the likes of Grumpy Cat, Manny the Frenchie, JiffPom, Tuna and others, deserves an article all its own.
But the one area on the brink of disrupting pet care, and with the greatest opportunity for new businesses, is connected pet. The category is defined as the intersection between pet care and the connected home. With the advent of smart home devices, it’s no surprise that pet parents all over the world are increasingly looking for more innovative ways to care for their furry friends. Pet cameras have been one of the first connected pet products to take off, and it’s no surprise. Just as parents worry about leaving their children at home unsupervised, pet parents also face concerns when leaving their pets on their own. Pet cameras enable people to remotely interact and play with their pets, schedule exercise, and securely share access from their smartphone. Our own product, Petcube, falls into this category and has over 100,000 people using it today. Other pet cameras include Petzi, Furbo and PetChatz.
Other connected pet products mirror technology first created for humans, Whistle, for example, is a Fitbit-like tracker used to locate your pet and measure their exercise and activity level. And there are many others on the market, including Pod, Tractive, Fitbark and LinkAKC.
Everyday tasks like feeding and cleaning after pets have also been upgraded. Petnet has built an advanced feeder system to schedule pet feeding, supporting health management with tracking calorie intake and tailoring portions. Another company, CleverPet, has designed a smart feeder that provides a memory game for pets. A company called Litter-Robot sells a self-cleaning litter box while Luuup raised a combined $3.9M on Indiegogo and Kickstarter for their cleverly designed litter box system with sifting trays.
Large corporations are seeing the opportunity as well. Big box retailers like Petco and Best Buy have invested in creating dedicated connected pet sections. Comcast and Google’s Nest are using pet-related use cases to appeal to mainstream consumers. Even pet food companies are taking action and embracing the connected pet category. In addition to Mars’ acquisition of Whistle, Well Pet, the company behind the Wellness pet food brand, has partnered with Petcube.
The future of connected pet.
Pets will become connected faster than many people realize. At Petcube, we estimate 40 million pet households will use a connected pet device by 2022, meaning half of US pets will be connected. Pets will enter our digital world in the most unexpected, delightful ways. Along with changes that technology brings in transportation, finance, agriculture, education and other industries, pet care too is being redefined.
We may still be some years away from comfortably having a drone walk our dog, but it’s obvious that a number of smart devices will be assisting pet parents in the very near future -- everything from having a better emotional connection, to feeding, entertaining and keeping pets healthy.
Just as we’ve seen throughout the history of technology, once a principal hardware innovation is made, software and services will then take center stage. At that point, connected pet business models will transition from pet hardware sales revenue to marketplaces and subscription-based models. This will create an enormous amount of opportunity for new pet tech startups to thrive.
The way we care for our pets is changing dramatically and having an impact on the overall industry. Consumers and their pets will ultimately be the biggest winners.
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