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Genetic testing for cats leaves one writer scratching his head

At SXSW, the pet tech space was quick to show off the promises—and challenges—the industry faces as cats get their own equivalent of 23andMe.

AUSTIN—There is officially a 23andMe equivalent for cats. Meaning you can now learn about the possibly royal ancestry of the rescued ball of fluff hiding on top of your refrigerator.

Anna Skaya, founder and CEO of feline genetic testing service Basepaws, believes the pet tech industry is ripe for venture capital investment. In a panel also featuring William Broun of Nestle-Purina, Brock Weatherup of Petco and Jay DeLong of Active Capital, Skaya told the unusual story of her feline startup being venture-funded in only two days.

“Two years ago, I was at SXSW talking with a C-corporation about my idea; two days after talking about it, I got my first check,” she said proudly in reference to Basepaws.

While this may be unusual in the world of VC, the panel clearly believed strongly in the industry’s potential as they made a pitch for pet tech and offered tips for any entrepreneur seeking to enter the space.

Weatherup argues that the industry is in a sweet spot, as millennials and people from Generation Z become the primary end consumer instead of baby boomers. He believes this is due to young couples no longer viewing a pet as a trial for having kids, but instead considering the pet to be the actual kid itself. Skaya also shared this belief, stating that “millennials spend more on their pets than their own healthcare,” though she did not cite any specific source for that statistic.

While the panel expressed strong optimism for the industry, there are challenges. Pet tech could be considered discretionary spending by households that view pets as nonessential, leading to fragile consumer retention rates and a recession-vulnerable industry. Further, the industry is limited in the goods and services that can be provided.

When asked by an attendee about the difficulties entrepreneurs face entering a recession-vulnerable industry, Skaya was quick to challenge preconceptions about consumer spending habits: “What if [a] recession hits? Will people still want to do DNA tests? A must-have or nice-to-have? Every investor has said this [industry] is not recession-proof. … We are working so hard to make sure consumers love the product so much that they will say, ‘I will forgo a lot to buy this product.’ I’m just working as hard as I can to not be the company that they let go of.”

Beyond assurances that the industry is recession-proof, the panel also offered tips for startups simply trying to find an idea for entering this comparatively quiet sector.

“See if [an idea] has gotten some traction from humans first,” Broun suggested. “It’s very hard to repair ACLs for a pet if it’s hard to do it for the human. … Pet care rarely leads human care.”

Overall, while the panel pitched the pet tech sector to new entrepreneurs as promising and particularly “ripe,” I wasn’t entirely convinced. Global expansion remains an issue as cultural differences worldwide determine which animals are pets, limiting portability for startups. Further, people will still care for their beloved pets in a recession, and there’s no compelling need for average consumers to pay for feline genetic testing or other discretionary services to simply care for their pet while money is tight.

Finally, pet tech companies ultimately are selling to humans, who in turn make buying decisions based on assumptions of what their pet wants or needs. There’s no inherent need for feline genetic testing, monthly dog treat subscription boxes or organic non-GMO dog food; these are constructed needs decided by humans, not the ultimate consumer—the dog, cat, or other pet in question. Therefore, the pet tech industry is particularly prone to shifting consumer tastes and discretion, leaving overall consumer demand fragile.

While the panel was knowledgeable on the space, it seemed they were essentially selling the pet tech space, rather than letting it speak for itself. Despite the panel’s frequent use of “ripe” to awkwardly describe something other than fruit, I left believing the industry to be no better off than any other industry where VC investors could park their money.

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