Private equity’s acquisition of vet practices has brought salary increases, professionalism—and higher prices

There’s been a lot of coverage recently about private equity buying up veterinary clinics and the coinciding rise in prices. It’s true that private equity is now the biggest buyer of vet clinics and hospitals.

What hasn’t been reported are the improvements this infusion of capital has brought to the vet sector. Vet medicine has progressed dramatically in the past decade; there are now options for dogs and cats with cancer, heart conditions, or even alopecia. Salaries for veterinarians and vet technicians have also increased while vet practices have been professionalized. But the biggest gain may be to the doctors themselves. “A lot of the vets are selling because it allows them to get back to the practice of medicine, which is where their heart is,” Cathy Bedrick, a partner and financial due diligence service network leader at KPMG, told Fortune.

Several vets, vet technicians, investors, and consumers told me that they are not against the “corporatization” of the vet practices and hospitals. As I wrote for Fortune:

Before private equity and corporations began buying up clinics, the vast majority of clinics were owned and run by vets. This led to a sector that was highly fragmented and dominated by ‘mom-and-pop’ practices that typically used antiquated software and lacked marketing expertise, while their physical offices were often dreary and out-of-date. Veterinary technicians, who work side by side with the doctors, also struggled under the arrangement. ‘We had amazing nurses that were leaving because they were not getting living wages,’ one vet, who declined to speak on the record, told Fortune.

That said, there has been a notable rise in vet care prices, and it’s causing some backlash among pet owners. From March 2020 to March 2024, veterinary services prices have jumped 32%, according to the Bureau of Labor Statistics’ Consumer Price Index. Last year, consumers spent $38.3 billion on veterinary care and products, up nearly 24% from the $31 billion they paid in 2020, according to the American Pet Products Association. There is no obvious reason why vet services have increased so much. Some blame the price hikes on inflation, some point to the increased cost of drugs and pet products, while others cite higher wages for veterinary technicians. And some think it’s just plain greed.

Whatever the cause, the increase in veterinary prices is having a big impact on some pet owners. Consider Charlene, a stay-at-home mom of three, who in March faced one of the worst decisions a parent has to make. Charlene could spend thousands of dollars on veterinary care for her daughter’s beloved pet rabbit, Boo, or she could refuse the additional debt and put the animal to sleep. Charlene couldn’t afford the medical options available for her pet and made the hard choice to put her family’s “precious bun bun” to sleep. “We decided it was best that she be at peace than in pain,” Charlene said. 

Read my story here.

Talk to you tomorrow,

Luisa Beltran
Twitter: @LuisaRBeltran
Email: luisa.beltran@fortune.com
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Joe Abrams curated the deals section of today’s newsletter.

VENTURE DEALS

- Attovia Therapeutics, a Fremont, Calif.-based developer of biotherapeutics for immune-mediated diseases, raised $105 million in Series B funding. Goldman Sachs Alternatives led the round and was joined by Cormorant Asset Management, Nextech Ventures, Redmile Group, EcoR1 Capital, Marshall Wace, Logos Capital and existing investors.

- Li Industries, a Pineville, N.C.-based developer of lithium-ion battery recycling technologies, raised $36 million in Series B funding. Bosch Ventures, Khosla Ventures, and LG Technology Ventures led the round and were joined by Formosa Smart Energy Tech Corp., Anglo American Decarbonization Ventures, and others.

- FleetPulse, a Chicago, Ill.-based telematics company, raised $6 million in seed funding from FourMore Capital.

- Lucid Bots, a Charlotte, N.C.-based developer of robotics for labor-intensive tasks, raised $9.1 million in Series A funding. Cubit Capital led the round and was joined by Idea Fund Partners, Danu Venture Group, and existing investors. 

- Sagetap, a San Francisco-based marketplace designed to match SaaS buyers and sellers, raised $6.8 million in seed funding. NFX led the round and was joined by Uncorrelated Ventures, Emergent Ventures, and others. 

- GoodDay Software, an Austin, Texas-based retail operating system built into Shopify, raised $6 million in seed funding from FirstMark, Ridge Ventures, Flex Capital, and others.

- Plenty, a San Francisco-based wealth-building platform for couples, raised $5 million in seed funding. Inovia Capital led the round and was joined by Garage Capital, Otherwise Fund, and Interplay.

- Jamango!, a Dublin, Ireland-based browser-native game creation platform, raised $2.5 million in pre-seed funding. Elkstone and Delta Partners led the round and were joined by angel investors.

IPOS

- ZEEKR, a Ningbo, China-based electric vehicle company, plans to raise up to $441 million in an offering of 21 million shares priced at $21 on the New York Stock Exchange. The company posted $7.1 billion in sales for the year ending December 31, 2023.

PEOPLE

- HarbourVest Partners, a Boston, Mass.-based private equity firm, promoted John Toomey to CEO.

- Kapor Capital, an Oakland, Calif.-based venture capital firm, hired Brandon Boros as a venture partner. Formerly, he was with Align Impact.

- SVB Capital, the Menlo Park, Calif.-based corporate venture capital arm of SVB Financial Group, promoted Dave Mullen and Carolyn Mazonson to partners on the investment team.