Korean VCs bet big on pet care startups

Startups in the pet industry are gaining traction on the back of a rising number of pet owners in South Korea. 

Industry insiders say several pet technology startups have either attracted or are in the process of attracting investment.

Varram, which operates the IoT-based pet healthcare platform Varram Pet, recently received Series A funding from Mirae Asset Venture Investment Co. and Shinhan Investment Corp. A venture capitalist familiar with the investment told The Korea Economic Daily that with the latest injection of funds, Varram has received more than 10 billion won ($8 million) in total. 

The company provides customized healthcare services for pets by analyzing the furry creatures' eating and drinking habits through its IoT-powered feeders and water foundations. 

Other startups in the industry that received funding so far this year include Key Basic, which operates Wigheal, Remetome and Berg & Ridge. 

Key Basic offers specialized health foods depending on a pet's age while Remetome makes pet beds and bedding with old linen from five-star hotels. Inspired by Scandinavian design, Berg & Ridge manufactures environmentally friendly pet products.

Late last year, pet training app Dog Master operator WalkyDoggy; pet pharmacy platform PetPharm; and veterinarian cost comparison app PetPrice garnered much interest from investors. 

Fitpet, which makes at-home physical checkups for pets and operates an online shopping mall for pet products, is preparing for a Series C round funding worth 20 billion won ($17 million.) In 2021, it received 23 billion won in investment. 

Its corporate value is expected to be around 200 billion won. 

Last July, GS Retail and IMM Private Equity acquired South Korea’s biggest pet e-commerce platform Pet Friends for 150 billion won.

Around the same time, petsitting service operator PetDoc Inc. received about 10 billion won in investment. 

South Korea’s pet care and product industry is growing rapidly.

According to data compiled by the Korea Rural Economic Institute, the size of the Korean pet care market stood at 3.8 trillion won ($3.2 billion) last year. Compared to 1.9 trillion won recorded in 2015, the size doubled in just six years. 

By 2027, the market size is expected to exceed 6 trillion won. 

“Because treating a pet as a member of the household has became the norm, the related industries are faring well,” a venture capitalist who preferred to remain anonymous said. “Conglomerates are also expanding their foothold in the industry, not just the startups and VCs.” 

Skepticism remains, however, as still no pet tech company has managed to go public. 

“While meaningful deals such as Pet Friend’s acquisition exist, the multiples are not big,” another VC industry insider said. “It is hard to confirm how much upside there is in the market.” 

The ratio of total value to paid-in (TVPI) capital, expressed as a multiple, provides insight into the investment performance of a startup by showing its total value as a multiple of its cost basis.

Write to Jong-Woo Kim at jongwoo@hankyung.com
Jee Abbey Lee edited this article.