SK Networks invests $20.7 mn in pet care startup

South Korean trading firm SK Networks Co. announced on Monday it has completed a 28-billion-won ($20.7 million) investment in the domestic pet care startup BMSmile. 

SK Networks secured a 10% stake by purchasing 135,811 new shares of BMSmile, making it the second-largest shareholder through this strategic investment.

BMSmile is the only startup in South Korea to have vertically integrated its corporate structure around the pet industry. Its flagship brand Pethroom has solidified its position as a leading brand in the K-pet market and is involved in various pet care-related businesses, including pet litter, pet supplies, and pet tech. The company also owns a subsidiary specializing in design intellectual properties called "Wiggle-Wiggle."

SK Networks decided to invest in light of the growth potential in the pet care market. According to the Ministry of Agriculture, Food and Rural Affairs, the domestic pet market reached 8 trillion won ($5.9 billion) in size in 2022, with an estimated annual growth rate of about 10%, expected to reach approximately 20 trillion won ($14.8 billion) by 2032.

The global pet market reached $368 billion in size in 2022. Additionally, the Pet Humanization trend, where pets are treated as family members, is expanding, with the average monthly cost of raising a pet increasing by 44% from 91,000 won ($67.3) in 2018 to 131,000 won ($96.9) in 2023.

Write to Joo-Wan Kim at kjwan@hankyung.com