The Swedish vet-on-demand app FirstVet has raised an additional €30m, just one year after its €20m Series B financial round. The goal is to go big in the US.
FirstVet was founded by David Prien and Joakim Widigs in 2016 and has since then expanded to Finland, Norway, Denmark, the UK and recently to Germany. The startup is similar to telemedicine startups like Kry or Babylon Health, however, it only deals with pets.
Telemedicine startups aimed at connecting human beings to their doctors via video link have in many cases reported a near doubling of users during the coronavirus crisis. But many similar startups focused on pets have also been booming due to the crisis.
“We have doubled our total number of active users from 200,000 to 400,000 the last 12 months,” Prien tells Sifted.
“We haven't used a majority of the capital that we raised a year ago, so our cash position is very strong. However, we have momentum right now and with the ongoing trend, both on a macro and a micro level, we believe now is the time to invest in our expansion,” he says.
The American willingness to pay
FirstVet started planning a move to the US more than a year ago. With a soft launch focused on Facebook groups and family and friends, it now has 14 people on the ground including vets.
The UK is still the fastest-growing market for the startup but the US market has a lot of potential. Even back in 2017, the US veterinary care market was worth $70bn.
But the business will look slightly different in the US than in other markets because Americans – apparently – don’t insure their pets.
“The difference in insurance penetration in Europe and the US is huge; in Sweden, almost 80% of pets are insured whilst in the US the same number is 3–4%.”
This matters because in Europe insurance companies, according to Prien, are actively pushing customers to use video consultations services like Firstvet because it’s cheaper for them than a face-to-face veterinary.
It means they have to do sales differently.
“In markets where we enter where the insurance rate is much lower, we drive sales together with our partners in a more proactive way."
On the plus side, the willingness of people to spend large amounts of their own money on their pets is much greater.
“I’ve heard that 80% of dog owners give their dogs birthday gifts. It is a different pet culture.”
Similar issue to doctor-on-demand apps
The funding round of €30m is led by Mubadala Capital, the investment arm of one of the world’s leading sovereign wealth funds in UAE, with participation from Cathay Innovation, alongside existing backers, the Canadian pension fund OMERS owned venture fund and European venture capital firm Creandum.
The new funding takes the total raised to just about €60m, a similar level to many of the telemedicine startups for people. Some telemedicine startups have even opened up their platforms for petcare. And there are other similarities too.
Although the field of vets-on-demand industry is completely privatised and has less regulation than for humans, the existing pet clinics and their views on digitalising care, will still need to be taken into account, according to Prien.
“It is a nascent field and the veterinary profession is culturally quite conservative. By rushing in and doing things too fast can hurt telemedicine as a concept. By prescribing antibiotics, for which a physical examination is necessary, is one thing that can hurt the whole industry."
This article first appeared in our monthly Unleashed Pet Tech newsletter, a collaboration with Purina Accelerator Lab. All content is editorially independent. Sign up to our newsletter here to keep up to date with the latest goings on in the European pet tech industry.
