As soon as I step into my sister’s apartment, I am greeted with the mechanical purr of toy mice, a scattering of tuna lollipops on her counter, and the sight of two very spoiled cats perched on top of a massive treehouse. I used to tease her for being an obsessed cat lady, but it turns out she’s far from the only one.

People across the nation, especially Gen Z and Millennials, are choosing to raise pets instead of kids, at least for the time being. This trend of people opting for pet ownership over parenthood doesn’t just result in millions of cute animal videos online; it has become a huge market opportunity. The humanization of pets and shifts in lifestyle priorities are driving a significant surge in pet-focused startups, and they’re starting to transform the VC landscape. These ventures highlight a larger truth: our bond with pets isn’t just emotional—it’s economic, and it’s changing how an entire generation approaches care and community.

While birth rates are declining globally, the pet population continues to increase. A report from Forbes states that 66% of U.S. households own at least one pet. This is equivalent to 86.9 million homes! Not only is there an uptick in the number of pets, but there’s a shift in what types of relationships we’re building with them. The same Forbes article states that 97% of pet owners consider their pets to be true family members. Our pets are being built mini bedrooms, thrown birthday parties, and styled in an array of pet outfits and accessories. Slowly but surely, these actions are expanding from cute students for social media to consumer behavior that entrepreneurs are catching on to.

As pets have begun to take on more human-like roles, the market has followed with additional pet products and services that mirror human health and lifestyle offerings. Rather than just addressing basic care, the emergence of luxury products and services expresses a consumer desire to vastly increase the quality of life of their pets. Consumers aren’t just looking for products that happen to serve their pets, but they want to buy from brands that celebrate them. When someone views their cat or dog as a family member, they’re not just buying canned food but making an intentional parenting decision. Many markets lack this emotional connection with their consumers, and it’s undoubtedly valuable for companies that can take advantage of it. 

Take these startups, for example:

  • Tractive, a specialized GPS device for pets, raised $35 million in a growth funding round to help expand efforts in tracking sleep and activity, along with pet location.
  • Loyal is attempting to aid in preventative care and mitigate age-associated diseases in dogs through developing a pill that will hopefully expand their lifespan. They closed a $45 million Series B round early last year.
  • Smalls, a start-up focused on making fresh, human-grade cat food, closed a $19 million Series B round in hopes of being the leading voice to improve feline health and well-being.

For Gen Z, pets are so much more than just animals. Many of us have dealt with increased loneliness and isolation, particularly as a result of the pandemic, and pets fulfill a need for stability, routine, and social interaction. We look for what’s best for our pets (spending an annual average of $6,103 on our furry companions!), and seek out brands that align with values such as sustainability, transparency, and inclusive marketing. This creates a devoted consumer base that is loyal and eager to fight for brands they resonate with. For startups building in the pet industry, the opportunity is more than just mitigating an issue. It’s in producing joy, community, and bonds through pet care.