VC interest in European pet tech ebbs

Venture capital deal activity in European pet tech fell after a pandemic-fueled surge in investment.

Over the past few years, pet care has undergone significant digitization, with new startups emerging to help owners manage their pets’ lives, from finding sitters to planning online vet appointments or arrange healthier pet food deliveries.

So far this year, €64.4 billion has been invested in European pet tech startups across 20 deals, according to data from PitchBook. The number of deals is slightly below last year’s record high, but the amount of capital spent has fallen significantly in 2022, currently standing at just over a quarter of the total amount raised in 2021.

With COVID-19, Europe has seen an increase in pet adoption and spending. However, with the cost of living becoming more expensive and investors becoming more cautious with their investments, transactions for pet tech have slowed.

Startups offering hyper-premium pet products are the most likely to be affected as a recession becomes a bigger possibility. Ongoing supply chain issues also continue to impact companies in the sector.

Most pet tech deals have been relatively small this year. Healthy cat food startup KatKin raised the biggest round with a recent Series A of $22 million. Other notable deals include medical insurance provider Dalma’s €15m funding round in June 2022 and a €5m investment in digital veterinary clinic Rex a month later.

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