have at least one pet, according to a study by the University of Melbourne, making caring for these animals big business. The pet category currently is worth approximately $15 billion annually, split between medical and discretionary supplies. And Pet Circle is poised to capitalise on this growing market though it won’t take any unnecessary risks to do so, according to chief financial officer Paul Jamison. Pet Circle will use the cash injection to shore up its logistics, fulfilment centre and digital capabilities, with an eye to improve the shopping experience for its customers. And Jamison pointed to a number of new verticals the company is investing in and exploring.  “We see huge opportunities in services like pet insurance and pharmacy, as well as [the use of] the Internet of Things around wellness and health tracking, with pet parents continually looking to improve their pet’s life and care,” Jamison told Inside Retail.  Premium food sales having grown 25 per cent year-over-year at Pet Circle, despite the cost pressures currently hitting customers, and sales for new category health supplements jumping 160 per cent. Though customers may be spending less on themselves, most pet parents are trying avoid downgrading the quality of the pet food they buy, according to Jamison. Instead, they’re looking for ways to save on quality products. Jamison pointed to Pet Circle’s best price guarantee and subscription offer, which allows customers to set up auto-buy and auto-deliver options for pet staples, which are then charged at a reduced amount. Capital is (no longer) cheap Global financial pressures, such as rising rates and inflation in almost all major economies, coupled with slowing customer spending, have triggered a difficult funding market for most businesses in the past several months.  High profile collapses, such as MilkRun, CoLab, and BWX, have signalled a cooling funding market, and a danger to businesses that are running light on cash.  Following Pet Circle’s $125 million Series C funding round last year, however, the business had a “strong cash runway” to continue investing in its growth. Despite this, Prysm approached Pet Circle to offer additional funding, and the business accepted, given the uncertainty around what a future funding opportunity would look like. Speaking to the Australian Financial Review, Prysm Capital partner Matt Roberts said the firm had upped its investment because the pet category is enjoying strong tailwinds globally, and Pet Circle could be a major player. Jamison added that, given the significant opportunity before the business, it made sense to secure the additional funding now, rather than test the waters later, and that Pet Circle is “confident to invest where we see value”.  Competition is heating up That opportunity is, indeed, significant. Pets are big business not only in Australia, but all around the world. However, Pet Circle isn’t the only player in the game. With pets in two-thirds of Australian homes, even players outside of the traditional ‘pet care’ industry are getting involved.  Home and hardware leader Bunnings is now offering 1,000 pet-related products in store; Beauty giant Mecca sells dog shampoo; Fashion marketplace The Iconic sells pet accessories; and, a number of fashion brands have extended into creating statement pieces for pets. Woolworths, arguably Australia’s biggest retailer, has also stepped up its involvement in the pet industry with the launch of its own pet insurance – although, this offer has been paused due to “deficiencies in the target market determinations (TMD) for the products” by Asic. A number of other pet insurance offers were also paused, including those offered by Petbarn and Pet Sure.  Even within Pet Circle’s more traditional wheelhouse, there is growing competition. A raft of online, direct-to-consumer pet food brands, such as Scratch, Lyka and Drools, are seeing growth, likely a result of the increased acceptance of online shopping for forms of retail outside of fashion.  It’s clear that Pet Circle sees the opportunity to lead the market, however. Jamison said that the business is aware of the “significant market opportunity” before it, and that, by investing in the right verticals, he is confident the business can thrive.