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XDogs and Cats - Living Together: The $75B Pet Economy and Why Los Angeles is Headquarters
Rachel Uranga is dot.LA's Managing Editor, News. She is a former Mexico-based market correspondent at Reuters and has worked for several Southern California news outlets, including the Los Angeles Business Journal and the Los Angeles Daily News. She has covered everything from IPOs to immigration. Uranga is a graduate of the Columbia School of Journalism and California State University Northridge. A Los Angeles native, she lives with her husband, son and their felines.

Snuggling on a chair, hovering over a laptop, stretched out on the floor, the long haired-haired, vaguely Calico-looking Koko with his own Instagram feed is a cat influencer in the making. He is also the face of Basepaws, a feline DNA testing service that's trying to tap into the $75 billion spent on pets in the U.S.
Gingi, a sweet feline that died too young, is the inspiration behind startup PrettyLitter, a mail-order cat litter that monitors feline health. And then there's dozens of dogs that inspired DogVacay, a pet sitting app that was sold last year to Rover. Founder Aaron Hirschhorn launched a new service last fall – stem cell storage banks for pets – motivated by his own experience using the regenerative treatment.
According to Pitchbook, pet tech startups in Los Angeles County have pulled in more than $500 million in investments in the last six years. The largest and most well-known came from Softbank Vision Fund for Wag Labs — once the poster child for app-powered pet services. As Wag struggles to compete with venture capital-backed Rover, a slew of other pet tech companies are making their mark offering premium services.
"When I started DogVacay in 2012, I heard venture doesn't belong in pets. I got lots of 'No, the markets are too small,' said Hirschhorn, who has raised $11 million in funding led by Maveron for his latest venture, Gallant. "Now, the first thing that I hear is that people spend so much on their pets."
DogVacay is a pet sitting app that was sold last year to Rover.
www.rover.com
Gallant, which launched in the fall, charges a $395 processing fee and $95 a year to store stem cells removed by a veterinarian when pets are spayed or neutered. It aims to make canine life healthier and longer. The company, which has a Federal Drug Administration compliant lab in La Jolla, appeals to veterinarians who can charge a fee for their service and have the promise of pets returning for treatment as they age.
The Pet Economy
Americans love their four-legged friends. More than half of U.S. households own a pet and while ownership rates haven't grown dramatically over the last decade, the amount people willing to spend on their animals has. The American Pet Products Association estimates last year spending topped $75 billion from $45 billion a decade earlier. And the figure is quadruple what it was in 1994.
"We see a ton of interest in the space," said Mike Jones, head of the Santa Monica incubator and investment firm Science Inc. His firm, which invested in DogVacay and Rover, recently backed DogDrop, a flexible canine day care. Jones said they made the calculation that with millennials choosing to have children later in life, animals would play a bigger role. "There's a lot of disposable income that people can spend on pets," he said. "The price point they are willing to spend is way higher."
There's companies like Modern Animal, a Playa Vista-based startup that wants to revamp veterinary clinics for the digital age with telemedicine and other services. It raised $13.5 million in seed funding last fall.
Gallant stores stem cells removed by a veterinarian when pets are spayed or neutered to make canine life healthier and longer..Gallant.com
Scratchpay, a Pasadena-based company that offers financing for veterinary care, scored $65 million in a Series B round in October.
And then there's companies more akin to Gallant like PrettyLitter, a mail-order litter that monitors for health by turning colors when urine shows unusual signs of alkalinity and other factors.
Their growth is part of a larger trend powered by Americans' relationship with their pets, mostly dogs. This humanization, as those in the pet industry like to call it, has driven a push in luxury products and services.
"More and more people are thinking of their pets as parts of their family, as human beings," said Hal Herzog, a professor of psychology at Western Carolina University who has spent decades looking at the relationship between human and animals.
"We spend twice as much on pets per capita as we did 30 years ago."
Where's the money going? On the extravagant side, there's pets spas, canine herbal medicine, Louis Vuitton pet carriers, and diet delivery services. And there's also a booming trend of influencer canines who have their own agents, like Instagram star JiffPom (and his 9.8 million followers).
Pet owners are willing to go to extremes to spoil their dogs and cats -- even wading into unregulated pet technology to keep them healthy.
Unregulated Pet Technology
Founded in 2016 by Anna Skaya, Basepaws promises to tell feline owners with a sample of saliva from their cheek, "the secrets to keeping their health in tip-top shape." The El Segundo-based company presents itself as a health service but operates in a non-regulated zone, along with several other pet companies coming up including PrettyLitter and Gallant.
Skaya, who previously ran Groupon in Russia, originally wanted to name her company 23andMeow. Her proprietary genetic testing provides cat owners with information about their breeds along with hereditary disease. For humans those service are approved by the Federal Drug Administration. Still they aren't intended for diagnostic purposes and there are various levels of evidence to support many of their claims.
PrettyLitter is a mail-order litter that monitors for health by turning colors when urine shows unusual signs of alkalinity and other factors.PrettyLitter.com
And while Skaya and PrettyLitter founder Daniel Rotman say that their services are not diagnostic — merely a tool — they want pet owners looking to improve their animals health to turn to them.
"When you do a DNA test it opens up this world about breeds and diseases," she said. "I always say the cats can't talk but their DNA can." Last year, she clinched $250,000 on Shark Tank and is looking to close a $2.5 million seed round next month.
The service runs $129 and she sees her company, growing to include nutrition products. Hirschhorn, who invested in Basepaws, sees it working for the very same reasons that he believes his own company will take off. "There's this macro trend toward health rather than fighting diseases," Hirschhorn said, adding that it's the same reason humans are taking greater care of themselves.
Skaya has loftier goals: "If we know what diseases they have, we can make sure they are not breeding. We are eradicating genetic diseases."
Rachel Uranga is dot.LA's Managing Editor, News. She is a former Mexico-based market correspondent at Reuters and has worked for several Southern California news outlets, including the Los Angeles Business Journal and the Los Angeles Daily News. She has covered everything from IPOs to immigration. Uranga is a graduate of the Columbia School of Journalism and California State University Northridge. A Los Angeles native, she lives with her husband, son and their felines.
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Snap Says It Will Miss Earnings Targets, Slow Down Hiring
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
Snap warned on Monday that it will likely report lower-than-expected revenues and profits this quarter—a revelation that sent the social media firm’s stock price plunging by 30%.
“The macroeconomic environment has deteriorated further and faster than anticipated,” Snap disclosed in a filing with the Securities and Exchange Commission. “As a result, we believe it is likely that we will report revenue and adjusted EBITDA below the low end of our [second quarter] 2022 guidance range.”
The Santa Monica-based company was already bracing for another challenging quarter due to economic headwinds like inflation and Russia’s invasion of Ukraine, which it said have harmed the digital advertising market. Snap, which generates virtually all of its revenue from ads, is also still grappling with Apple’s decision to restrict how users are tracked on mobile devices.
As a result of the gloomy outlook, Snap is set to slow down on hiring. The company now plans to hire another 500 new employees through the end of this year, compared to the 900 employees who have already accepted offers this year and the 2,000 people it added over the last 12 months, according to The Verge, which cited a memo from Snap CEO Evan Spiegel.
“Our most meaningful gains over the coming months will come as a result of improved productivity from our existing team members,” Spiegel wrote in his note to staff.
Snap’s shares subsequently fell more than 30% in after-hours trading, to $15.71 as of 4:45 p.m. Pacific Time. The company’s stock closed Monday’s trading at $22.47—down 52% since the start of this year and 73% off its 52-week high in September. (Disclosure: Snap is an investor in dot.LA.)
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
Halsey Blasts Record Label for ‘Fake Viral’ TikTok Requirement
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
The singer Halsey has claimed that their record label is requiring TikTok momentum before letting them release new music, in comments that draw attention to the video-sharing app’s growing influence over the music industry.
In a TikTok video released Sunday, Halsey claimed the Astralwerks-Capitol label will not allow them to release their latest song until “they can fake a viral moment on TikTok.” Halsey played the song in the background as they said that “basically every artist these days” is stuck waiting for TikTok virality as they plan music releases. In a subsequent series of Tweets, Halsey said that their TikTok video ironically going viral has not yet resulted in a release date, despite the song having been ready for a month.
The response has ranged from people viewing the video as a disingenuous marketing scheme meant to gain sympathy to others expressing support for the musician.
“Our belief in Halsey as a singular and important artist is total and unwavering,” an Astralwerks-Capitol rep told Variety. “We can’t wait for the world to hear their brilliant new music.”
Other musicians have recently expressed similar complaints. Ahead of Adele’s 2021 album, the singer said she shot down her team’s request to share her new music on TikTok. But few in the industry have Adele’s reach, and artists like Florence Welch, Ed Sheeran and FKA Twigs have all taken to TikTok at their labels' behest.
In April, Lizzo released her latest single “About Damn Time” on TikTok with an accompanying dance; the audio has since been used in over 1 million videos on the app, while the song made it to no. 9 on the Billboard Hot 100 chart. Other music artists are using TikTok stars to promote their material, with singer Harry Styles tapping influencer Brittany Broski to take over his social media ahead of his recent concert.
As artists can now grow their audiences on social media without relying on traditional mainstream media, it’s clear that TikTok has disrupted the industry. Take Lil Nas X, who used the app to promote "Old Town Road" and was up for five Grammy awards this year. On occasion, a short singing clip can even lead labels to sign new artists, as was the case with Australian singer Peach PRC.
A viral moment on TikTok can also take an unknown song or music project to new heights. “The Unofficial Bridgerton Musical,” a passion project started on the platform, beat theater legend Andrew Lloyd Webber to take home a Grammy earlier this year. Having bought the rights to Universal Music Group’s catalog and launched a platform that would allow artists to monetize their music uploaded to the app, TikTok is certainly leaning into its industry impact.
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
Activision Blizzard Workers Win Union Vote
Samson Amore is a reporter for dot.LA. He previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Samson is also a proud member of the Transgender Journalists Association. Send tips or pitches to samsonamore@dot.la and find him on Twitter at @Samsonamore. Pronouns: he/him
Workers at Activision Blizzard subsidiary Raven Software won their labor union vote today—a move that certifies the first union at a major video game publisher in the U.S., and one that could potentially transform the Santa Monica-based game developer that Microsoft is paying $69 billion to acquire.
Twenty-two employees at Wisconsin-based Raven voted 19-to-3 in favor of ratifying their Game Workers Alliance union in a National Labor Relations Board-sponsored election on Monday. The Raven workers—who do quality assurance testing for popular Activision titles like “Call of Duty”—formed the Game Workers Alliance in January and proceeded with the vote after Activision refused to voluntarily recognize the union.
The vote marks the first time that employees at a AAA game publisher in the U.S. have successfully unionized their workplace. It could also be a key step toward unionizing the rest of Activision’s 10,000-person workforce—something that Raven labor organizers told dot.LA earlier this year is part of their larger plan.
“We respect and believe in the right of all employees to decide whether or not to support or vote for a union,” Activision spokesperson Talia Ron told dot.LA in an email Monday. “We believe that an important decision that will impact the entire Raven Software studio of roughly 350 people should not be made by 19 Raven employees.”
None of Activision’s major competitors, such as West Los Angeles-based Riot Games, have unionized employees. Across the entire video game industry, only indie studio Vodeo Games has a labor union—one which became the first certified game workers’ union in North America last year.
“This is a huge win for not only the gaming industry but AAA gaming, because this is the first studio you're seeing out of a AAA [publisher] actually unionizing,” labor organizer and former Activision quality assurance tester Jessica Gonazlez told dot.LA.
Pro-union Activision employees have long felt that an organized workplace could provide the muscle they need to address issues that have plagued the company and their industry at large—from long, grueling work hours to sexual harassment and discrimination. “I'm very, very hopeful that this is going to be part of a larger wave of unionizing in the video game industry as a whole,” Gonzalez added.
While Microsoft executives have said that the Seattle tech giant won’t stand in the way of union efforts at Activision, the game developer has taken steps perceived as anti-union among its workers—such as leaving Raven Software employees out of a pay bump for quality assurance testers and proposing contract language that would prevent workers from organizing. Raven workers began organizing after walking off the job in December in protest of Activision’s decision to lay off 12 quality assurance contractors.
In a statement, Sara Steffens, secretary-treasurer for the Communications Workers of America labor union backing Raven’s Game Workers Alliance, said “Activision did everything it could, including breaking the law, to try to prevent the Raven QA workers from forming their union.”
“Quality assurance workers at Raven Software are bringing much-needed change to Activision and to the video game industry,” Steffens said. “At this critical time for the company and its employees, these workers will soon have an enforceable union contract and a voice on the job.”
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Samson Amore is a reporter for dot.LA. He previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Samson is also a proud member of the Transgender Journalists Association. Send tips or pitches to samsonamore@dot.la and find him on Twitter at @Samsonamore. Pronouns: he/him